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December 21, 2010

Tips for FHA Streamlining

Category: FHA Mortgage,Published Articles – admin – 7:20 pm

1. What does a borrower need to qualify for a FHA streamline refinance?

The first key component is that borrowers must presently have a FHA loan.

• Borrowers must have made at least 6 months’ worth of FHA mortgage payments.

• No mortgage payments can have been reported as “late” or delinquent” on the loan over the last year.

2.  Is there a home appraisal needed for qualification purposes?

In most cases, there is no formal appraisal required for FHA streamlines. This helps many underwater borrowers refinance in a pinch. Some borrowers who have no equity issues may want to do an appraisal because it enables them to finance their closing costs.  Last year, HUD changed the FHA loan guidelines to no longer allow borrowers to finance lender closing costs on the standard FHA streamlines.  No cost FHA loans are available to qualified borrowers, so discuss your eligibility for no cost refinancing.  This means that if your lender charges for processing, underwriting, title, escrow and loan origination that you will have to pay for these streamline refinance closing costs unless you qualify for a no cost FHA streamline.

3. Does a FHA streamline require income documentation?

In most cases with a FHA streamline refinance if the borrower is a salaried employee, the underwriter will not ask for income documentation like paystubs or W2’s.  However they will verify with your employer that you are still currently working with the company in the position that you stated on your residential loan application.

Read the original article > 3 Secrets of FHA Streamlines online.


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November 4, 2010

Fed Committed to Low Rate Refinancing

Category: Mortgage Rate Report,Published Articles – admin – 6:56 am

Will the great rates be hanging around in 2012? The Federal Reserve Chairman Ben Bernanke announced that the economic conditions will “warrant exceptionally low levels of the federal funds rate for an extended period.”  Keeping mortgage refinance rates low is expected to help spur the recovery.

Some economists anticipate this message changing in the future.  When this occurs, the historically low fixed mortgage refinance rates disappear.  The affordable home financing has benefited Americans looking for new home loans & people who wanted to refinance their current mortgages.

The home loan rates are great at the moment but no one knows how long the record low rates will last.  Home Loan Wholesale recommends locking the rate If you have been considering purchasing a new home or a mortgage rate refinance, you may want to act now to take advantage of the current historically low rates.

Should You Refinance Your House Now or Wait?

Refinancing your mortgage into a lower rate loan could potentially save you thousands of dollars a year so don’t wait too long.  It can also make your monthly payments more manageable by extending your remaining loan term.  With home loan rates forecasted to go up in the near in future, another reason to refinance would be to reduce the risk of an adjustable rate mortgage by stabilizing the monthly payments with a fixed rate home loan.


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October 20, 2010

Home Loan Qualifications Getting Tougher

Category: Mortgage News,Published Articles – admin – 11:44 am

Mortgage professionals continue to complain that not enough consumers qualify for a home mortgage today.  Even with record low home loan rates, qualifying has become a serious concern for millions of home buying prospects.  Two years after the depths of the financial crisis, the pendulum is still swinging away from the days of “Everybody’s Approved” regardless of credit.  It was not that long ago that mortgage bankers required almost no proof that a customer had the ability to pay back a home mortgage. Before the housing market crashed, even industry insiders ridiculed certain popular mortgages as “NINA” — “no income, no asset” mortgages.  No income verification loans are hard to find these days.  Banks and lenders are approving home loans with a lot more scrutiny. In an effort to minimize loan defaults, they have significantly raised underwriting requirements needed to get approved for a home loan.

The crackdown comes as major banks find themselves mired in controversy at the other end of the credit spectrum. What is described by some as a technical error signing thousands of affidavits for foreclosures without proper review — has turned into a political scuffle ahead of next month’s U.S. elections. Facing pressure from U.S. lawmakers, Bank of America said on Friday it would halt foreclosures in all states, fueling concern that outstanding FHA mortgage loans will further hinder housing’s rebound from its worst crisis since the 1930s.   Yet, as Shipe’s case suggests, the market for new home loans is not much more encouraging. And while foreclosures are capturing most of the headlines, barriers to credit affect far more Americans and could be a bigger drag on any recovery.

Shipe never gave a moment’s thought to the possibility that she would struggle to secure a mortgage.   After all, she has a credit score above 800, far higher than most Americans. And as the chief executive of the Council of Real Estate Brokerage Managers, an industry group that is affiliated with the National Association of Realtors, she happens to be an insider.  Shipe is also debt-free. In her last home she not only paid her mortgage on time, but also put an extra $1,000 per month toward the principal. To top it off, she has banked with JPMorgan Chase — whom she came to for a home loan, for more than a quarter of a century.   But when Shipe applied for a jumbo mortgage loan over $417,000 toward a $630,000 town house in Chicago’s affluent Lakeview neighborhood, she was told she needed 20% down instead of the 10% she was expecting. So she reluctantly used cash savings and withdrew money from her money market account.   Then came the tedious process that has recently become almost unbearable for solid borrowers trying to take advantage of a sluggish market and alluring low mortgage interest rates.

The push on documentation has been exacerbated by the growing struggle between the nation’s largest lenders and Fannie Mae and Freddie Mac, the U.S. institutions that help provide some three-quarters of funding for residential loans.   Known as government-sponsored enterprises, or GSEs, Fannie Mae and Freddie Mac have required taxpayer bailouts of $150 billion since late 2008, and have warned they will need more mortgage relief from the U.S. Treasury.

Today, the two companies are scrambling to recoup some of the losses that continue to pile up on the $5 trillion in home loans they helped fund. To that end, they are scrutinizing loan data for minutiae that would disqualify them under their standards. Banks are then being asked to buy back billions of dollars in loans Freddie and Fannie deem as problematic, forcing the lenders to increase reserves and legal teams to contest claims.   All told, the U.S. banking industry stands to lose up to $44 billion as they “repurchase” such mortgages. More than half of that total is expected to be absorbed by five big banks: Bank of America Corp, JPMorgan, Citigroup, Wells Fargo and SunTrust, according to Paul Miller, an analyst at FBR Capital Markets.

Mortgage lenders, brokers and borrowers are caught in the crossfire. During the housing boom, a borrower could turn to private investors. But today Fannie Mae and Freddie Mac along with the Federal Housing Administration and Ginnie Mae — have a hammerlock on market share.  See the original MSNBC article.

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August 2, 2010

Motivating First Time Homebuyers Beyond Low Mortgage Rates

Category: Financial News,First Time Home Buyer Loans,Published Articles – admin – 11:12 am

There are several factors that contribute to lack luster home loan activity in the summer of 2010.  Yes the tax credit for first time homebuyers expired on April 30th.  Sure that was a good incentive to drive first time homebuyers, but this is not the primary reason that home loan application volumes have been faltering the last few months.  If Forrest Gump was hear, he might say, “It’ the loan guidelines stupid.”  Read the original Nationwide Lender article > First Time Homebuyers Beyond Low Mortgage Rates.

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July 28, 2010

Financial Reform Bill Flawed

Category: Mortgage Lender Discussion,Mortgage News,Mortgage Reform News,Published Articles – admin – 1:44 pm

Much to the surprise of many pundits, the recently signed Financial Reform Bill did not outline guidelines for regulators to begin crafting the future of Fannie Mae, Freddie Mac, and Ginnie Mae.  Although this was viewed as an oversight by most, it was the right move because it will allow our political and financial leadership to focus on repairing the mortgage finance system.  Remember that the government loan programs Fannie, Freddie, VA and FHA loans maintain nearly 96% of the mortgage market-share yet they are exempt from most of the financial reform repercussions.   

httpv://www.youtube.com/watch?v=IeREpKxIYhY

In April, Treasury outlined their “Housing Finance Reform” objectives. The administration’s proposals will be designed to achieve four objectives.

  1. Mortgage credit should be available and distributed on an efficient basis to a wide range of borrowers.
  2. A well-functioning housing market should provide affordable housing options, both ownership and rental, for low and moderate-income households.
  3. Consumers should have access to mortgage products that are easily understood.
  4. The system should distribute the credit and interest rate risk in an efficient and transparent manner that minimizes risk to the broader economic system an does not generate excess volatility or instability

Demand for home loan financing has hovered near the 13-year low reached earlier this month, showing the lowest mortgage rates on record have yet to spur sales after the expiration of a government tax credit. It will take gains in employment and in consumer confidence to boost housing.   “The housing market is weak,” Paul Anastos, president of Mortgage Master Inc., a Walpole, Massachusetts-based mortgage lender, said in an interview before the report. “There’s good opportunity out there in the housing market, but because consumer confidence is fairly low, people aren’t really shopping. They’re worried about other things, like jobs.”

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July 21, 2010

MBA Report Concerning with Mortgage Origination Costs Soaring

Category: Financial News,Loan Origination News,Published Articles – admin – 5:25 pm

A recent survey from the Mortgage Bankers Association indicated that the cost of mortgage loan origination was soaring.  In their report MBA stated that independent mortgage bankers and their subsidiaries reported a significant decline in their profits in the 1st quarter of 2010.  The average profit made on each loan was $606, a decrease of 32% from the $890 that was earned in the 4th quarter of 2009 and a 44% decline from the $1,088 that was reported in the 1st quarter of 2009.  75% of the firms in the study posted pre-tax net financial profits in the 1st quarter 2010, compared to 76% in the 4th quarter of 2009.

Survey respondents reported a drop in the average production volume to $157.8 million from $216.5 million in the previous quarter.  MBA reported that the home loan rates remained low but as closing costs rose the volume decline was the main driver behind the decline in profitability.   As home loan volume fell, operating expenses increased to $5,147 per home loan compared to $4,402 in the 4th quarter, an increase of 17%.  The “net cost to originate” rose to $2,945 per loan in the 1st quarter of 2010, from $2,345 per loan in the 4th quarter of 2009.  This figure includes all production operating expenses and commissions minus all fee income, but excludes secondary marketing gains, capitalized servicing, servicing released premiums and warehouse interest spread.

Despite this challenge as originations declined in the first quarter, the independents and bank subsidiaries still produced an average of thirty two basis points of production profit, primarily resulting from higher secondary marketing gains.”  MBA’s 1st Quarter 2010 Mortgage Bankers Production Survey covers 295 companies, 70% of which are independent mortgage companies.

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Best Mortgage Ever?

Category: Mortgage Lending Stories,Mortgage News,Published Articles – admin – 3:19 pm

Will 2010 be remembered for the year of the best mortgage ever?  Nationwide published an article today that considers the realty of  this new era of record low rates. Many people are baffled that the record low mortgage rates have not sparked a refinance or housing boom.  In the past when the Federal Reserve took measures like discounting key interest rates it usually spurred a housing boom that led to a sharp rise in homeownership.  In 2010 there is a decrease in homeownership mostly because even though money is cheap it is still not financially feasible for struggling consumers who are experiencing a loss of income and the threat for job loss is the most real it has been since the Great Depression in the 1930’s.

Popular loan programs like cash out second mortgage loans and interest only mortgages have almost completely disappeared.  Bad credit mortgage options are few and far between with FHA and VA home loans occasionally taking a risk on a borrower with a poor credit score.  Home equity loans were once offered at 125%, but now you can consider yourself truly blessed if you qualify for a 90% equity loan.  Even the FHA streamline refinance loan requires borrowers to pay for the closing costs “out of pocket.”  Most borrowers are using a FHA loan for cash out refinancing because they do not require a 700 credit score like most home equity lenders demand today.

Undoubtedly the pool of borrowers that qualify for mortgage refinancing or home buying has shrunk, but maybe there is a silver lining.  In the near future interest rates will likely rise.  If you are one of the chosen few who meet today’s home lending requirements you just might qualify for the mortgage loan of a lifetime.  If you do qualify – - – Seize the opportunity and lock into the lowest fixed rate ever!  Read the original Nationwide article > Mortgage Loan of a Lifetime

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July 13, 2010

Comparing the Pre-Approval to the Pre-Qualification for Home Buying

Category: First Time Home Buyer Loans,Home Loan Guidelines,Published Articles – admin – 8:25 am

Smart Home Financing posted a helpful article that compares the pre-approval to the pre-qualification.  Many first time homebuyers find themselves confused when discussing their needs mortgage needs with a lender or broker.  The mortgage pre-approval is a written letter that includes a loan decision from the underwriting department after a borrower completes the residential loan application.  A pre-approval letter is a great negotiating tool for home buyers because it lends them credibility and helps the seller make a decision on their perspective offer.

Many first time home buyers prefer FHA mortgage loan options because these loans only require a 3.5% down-payment.  For homebuyers with a military background we recommend VA mortgage programs because they require no down-payment.  VA home financing is available up to 100% even for first time homebuyers.  Read the original article online at the Smart Home Financing Blog > Pre-Qualification Versus Pre Approval Letter

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July 7, 2010

Citi Shuts Down Wholesale Jumbo Mortgage Loan Program

Category: Loan Origination News,Mortgage Industry Rumors,Mortgage Lender Discussion,Mortgage Lending Stories,Published Articles,Wholesale Broker Discussion – admin – 11:36 pm

According Paul Muolo from Origination News online, CitiMortgage ceased closing wholesale jumbo mortgage loans a few months ago.  This devastated many mortgage brokers who counted on Citi for competitive jumbo mortgage loan products. National Mortgage News reported that CitiMortgage has started to slowly bring back their jumbo mortgage products in their retail branches. Muolo cited a former Citi jumbo mortgage loan broker that said Citi’s retail jumbo pricing “is not competitive.” In addition, to he reported that certain mortgage service companies are not approving loan modification plans unless the borrower is at least 30-days delinquent.

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July 6, 2010

More Homeowners Refinancing

Category: Lead Buying Tips,Lead Generation,Mortgage Marketing,Mortgage News,Published Articles – Jenny King – 7:57 am

Several reports published last week signaled that refinancing is supporting the mortgage business with over 75% of all loans being submitted into process are considered a refinance transaction.  According to a recent Mortgage Lead Vault post, the refinance lead activity spiked last week.  MBA also released similar statistics in their Weekly Mortgage Application Survey indicating there was 12.6% in home refinancing applications from the previous week.  Chief economist for the Lead Planet, Kevin Grant said, “the mortgage lead quality should dramatically increase as the banks and lenders loosen up their refinance guidelines.” See the original news article> Mortgage Refinance Lead Volume Rises.

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June 7, 2010

Home Refinancing Tips

Category: Home Refinance Tips,Mortgage Lender Tips,Published Articles – admin – 9:31 am

Mortgage Refinancing Buzz posted another article offering home refinance advice to consumers shopping for a refinance loan online.  The article looks back a few years to the mortgage crisis and chronologically leads up to 2010 and the lowest refinance rates that our country has seen in 50-years.  They reminded us how we got here with thousands of lending companies and banks going out of business and the federal government deciding to take on a larger role in home loans.  Yes mortgage lenders continue to tightened refinance guidelines because foreclosures and loan defaults continue to mount across the country.  Mortgage Refinancing Buzz noted that a few of the with government loan programs continue to take risks.   Mortgage refinancing tips are available online so go to the MRB blog to get the insight.  Read the original article > Mortgage Refinancing Advice for 2010

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May 18, 2010

Merging Fannie Mae and Freddie Mac

Category: Fannie Mae,FHA Mortgage,Financial News,Freddie Mac,Mortgage News,Published Articles – admin – 9:59 am

After several mortgage bailouts a no end to loan defaults insight, it is not unreasonable to ask the question —- Why do we need both Fannie Mae and Freddie Mac?  In a recent article in the Huffington Post, a strong recommendation from the editor arose for Fannie Mae and Freddie Mac to clean up their act and merge the two government mortgage giants. The Huffington blog called for a new strategic plan for Fannie and Freddie to find a common goal and merge. The federal government has gotten tangled too deep in this mortgage mess and many believe if they continue it will significantly prolong the recession.  The FHA mortgage loan programs have been able to recover so why can’t Fannie and Freddie follow suit?

The Post points out that merging Fannie Mae and Freddie Mac to form “Fannie Mac” is a logical step to shift responsibility to new stockholders. The plan will also return the taxpayers’ subsidies to the Treasury.  Both GSEs have similar missions. Most of their loan programs are comparable and the merger is logical. The new Fannie Mac will trim its staff and get rid of highly paid senior and middle management who perform the same functions.   The GSEs have one-to-four family, home-lending divisions that buy home loans from banking institutions. They have separate divisions to purchase multifamily loans for rental properties with five units or more. Some of the programs within each division are similar enough to be combined and further reduce the company’s size.  These government mortgage companies need to dispose of the dispose of their toxic assets like the loan defaults, and bad credit home loans.

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