Over the last 3 weeks application for Home Path financing have picked up. Home Path is a program that Fannie Mae is offering to buyers who want to buy homes that Fannie Mae own from foreclosures. Fannie Mae’s Home Path Financing allows for a minimum of 5% down payment, NO MORTGAGE INSURANCE and does not require an appraisal. The fact that these loans do not require mortgage insurance is a major benefit to buyers ability to purchase affordable homes. Interest rates are low and coupled with the fact these home do not require an appraisal this is a very attractive option.
Many home owners who have thought about putting up to 20% down on a purchase of a home are finding it more resalable to take advantage of the minimum down payment and keep their cash for expenses once they move in. Many of my buyers of Home Path homes are telling my, they are amazed about the good conditions many of these homes are in. This makes buying a foreclosed home from Home Path more attractive compared to other foreclosed homes that are not in as good of condition.
For Home Path financing, Fannie Mae have been paying up to 6% of the Buyers closing costs. In most cases this is more than the needed closing costs and we are using the additional closing costs to buy down (paying discount points) the borrowers interest rate in order to get the buyers an even lower rate.
Qualifying for Home Path is pretty easy. We are looking for credit scores above 620 and be able to prove all income and assets. For borrowers who have less than 620 credit scores we are offering FHA loans and we will also help direct buyers in the right direction to improve their credit scores. This is a great program for First Time Home Buyers.
Friday, May 29, 2009
Saturday, May 2, 2009
HOME VALUATION CODE OF CONDUCT (HVCC)
In December 2008 the Federal Housing Finance Agency approved the Home Valuation Code of Conduct (Code) to be implemented May 1, 2009. The code modifies Fannie Mae and Freddie Mac seller-servicer guidelines to improve the reliability of home appraisals and to restore appraiser independence. The aim of the code is to assure that all parties involved in the mortgage market will receive fair and independent property valuations. Among other changes, the code sets in place new
rules and regulations governing
The process for ordering appraisals
Appraiser independence
Improper influences on appraisers
May 1st was the start of HVCC. This is Fannie Mae and Freddie Mac so called solutions to appraisers over estimating home values. Before May 1st Mortgage companies could directly order an appraisal from an appraiser. HVCC requires mortgage companies to order appraisals through and appraisal management company. It is thought that this will stop contact between loan officer/mortgage companies and appraiser. HVCC wants to stop loan officer/mortgage companies from influencing appraiser to bring in homes at certain inflated values.
What does this mean to borrowers. The cost of appraisals will go up. I am seeing a $25.00 increase. Turn around times will be longer and in many causes the quality of the appraisals will go down. The reason for this is most mortgage companies will use a national appraisal management company. National appraisal companies charge up to $400 for an appraisal and only pay the appraiser about $200 for an appraisal. Most of the best appraisers who have experience will not work for $200 for an appraisal. This leave allot of the work to be done by appraisers who are less experienced and will be forced to turn out appraisal like a factory.
Nova Home Loans works with Accurate Appraisal Management a Tucson based company who pays their appraisers more than a national management company, guaranties a 5 day turn around time and charges the borrower only $375 for most report. Accurate appraiser list is loaded with top quality appraisers who know the local ares and are proven appraisers. This insures Nova Home Loan borrowers receive the best quality appraisals available. This is another advantage of borrowers working with Nova Home Loans.
rules and regulations governing
The process for ordering appraisals
Appraiser independence
Improper influences on appraisers
May 1st was the start of HVCC. This is Fannie Mae and Freddie Mac so called solutions to appraisers over estimating home values. Before May 1st Mortgage companies could directly order an appraisal from an appraiser. HVCC requires mortgage companies to order appraisals through and appraisal management company. It is thought that this will stop contact between loan officer/mortgage companies and appraiser. HVCC wants to stop loan officer/mortgage companies from influencing appraiser to bring in homes at certain inflated values.
What does this mean to borrowers. The cost of appraisals will go up. I am seeing a $25.00 increase. Turn around times will be longer and in many causes the quality of the appraisals will go down. The reason for this is most mortgage companies will use a national appraisal management company. National appraisal companies charge up to $400 for an appraisal and only pay the appraiser about $200 for an appraisal. Most of the best appraisers who have experience will not work for $200 for an appraisal. This leave allot of the work to be done by appraisers who are less experienced and will be forced to turn out appraisal like a factory.
Nova Home Loans works with Accurate Appraisal Management a Tucson based company who pays their appraisers more than a national management company, guaranties a 5 day turn around time and charges the borrower only $375 for most report. Accurate appraiser list is loaded with top quality appraisers who know the local ares and are proven appraisers. This insures Nova Home Loan borrowers receive the best quality appraisals available. This is another advantage of borrowers working with Nova Home Loans.
Friday, May 1, 2009
Mortgage Update for the weekend
Mortgage bond prices fell last week applying upward pressure on mortgage interest rates. Trading remained extremely volatile with daily swings of 3/8’s in discount points a common occurrence. The economic data released was mixed with no clear indication of the direction of the US economy. The Federal Reserve met last week and the governing body indicated the pace of economic deterioration is slowing.
The employment report to be released next Friday will be the most significant data this coming week. Productivity data will be important also. Additional debt supply hits the market this week with the Fed auctioning $71 billion of 3, 10, and 30 year Treasuries. It will be interesting to see if the market can continue to absorb the additional debt.
So far the Fed has been able to keep mortgage interest rates relatively low while not destroying the functioning secondary market where investors buy and sell mortgage bonds. The potential negative is that the Fed has become the primary purchaser of these bonds. In the short term take advantage of these advantageous rates. There is uncertainty how things will play out once the Fed begins to unwind those positions in the futures.
FHA announced last month an increase in lending limits for both traditional loans as well as Reverse Mortgages. Pima County was raised from $271,050 back up to $316,250. Maricopa was raised to $346,250. Feel free to follow the link to HUD's website for all other counties in AZ. https://entp.hud.gov/idapp/html/hicost1.cfm This is welcomed news for your buyers looking to put down as little as 3.5% and for your sellers in these higher priced ranges. This will open up more properties that will be available for FHA financing. Keep in mind, Nova still does offer 95% financing for conforming limits up to $417k.
Please make note that Nova Home Loans still allows FICO scores as low as 580 for FHA & VA loans. However, Nova is considering increasing our minimum FICO score requirements from 580 to 600. This change can happen as early as next week. If you have any FHA or VA buyers that have a FICO score of 580-599, they need to identify a property and allow us to lock their loan in under current guidelines before they change.
The employment report to be released next Friday will be the most significant data this coming week. Productivity data will be important also. Additional debt supply hits the market this week with the Fed auctioning $71 billion of 3, 10, and 30 year Treasuries. It will be interesting to see if the market can continue to absorb the additional debt.
So far the Fed has been able to keep mortgage interest rates relatively low while not destroying the functioning secondary market where investors buy and sell mortgage bonds. The potential negative is that the Fed has become the primary purchaser of these bonds. In the short term take advantage of these advantageous rates. There is uncertainty how things will play out once the Fed begins to unwind those positions in the futures.
FHA announced last month an increase in lending limits for both traditional loans as well as Reverse Mortgages. Pima County was raised from $271,050 back up to $316,250. Maricopa was raised to $346,250. Feel free to follow the link to HUD's website for all other counties in AZ. https://entp.hud.gov/idapp/html/hicost1.cfm This is welcomed news for your buyers looking to put down as little as 3.5% and for your sellers in these higher priced ranges. This will open up more properties that will be available for FHA financing. Keep in mind, Nova still does offer 95% financing for conforming limits up to $417k.
Please make note that Nova Home Loans still allows FICO scores as low as 580 for FHA & VA loans. However, Nova is considering increasing our minimum FICO score requirements from 580 to 600. This change can happen as early as next week. If you have any FHA or VA buyers that have a FICO score of 580-599, they need to identify a property and allow us to lock their loan in under current guidelines before they change.
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