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.
Saturday, May 2, 2009
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.
Friday, April 17, 2009
Fannie Mae Refinance Plus Yes Refinance without equity!!!!
Fannie Mae is offering home owners who have seen the value of their homes go down an option to refinance up to 105% of the current value of the home at rock bottom rates. The very best part of this is that if your current loan does not have mortgage insurance it will not need mortgage insurance even it the loan is over 80% of the appraised value. Some other great parts of Refinance Plus is if you had a “combo loan” like a 80/20 to avoid mortgage insurance you can still refinance the first mortgage up to 105% loan to value with out having mortgage insurance.
Many properties will not need an appraisal and the income documentation has been reduced also. There is no minimum credit scores required and most residential properties qualify.
For loans that currently have mortgage insurance, when you refinance your mortgage insurance rate will not go up. Most problems people are facing now when refinancing is not being able to receive mortgage insurance or the new mortgage insurance is so expensive that the savings are loss even with the lower rates. Refinance Plus keeps your mortgage insurance rate were they were before.
Contact me today to see if your loan will qualify for this wonderful money savings loan.
Many properties will not need an appraisal and the income documentation has been reduced also. There is no minimum credit scores required and most residential properties qualify.
For loans that currently have mortgage insurance, when you refinance your mortgage insurance rate will not go up. Most problems people are facing now when refinancing is not being able to receive mortgage insurance or the new mortgage insurance is so expensive that the savings are loss even with the lower rates. Refinance Plus keeps your mortgage insurance rate were they were before.
Contact me today to see if your loan will qualify for this wonderful money savings loan.
Tuesday, April 7, 2009
Rates could get better today!!
MBS (mortgage-backed securities) opened up today due to some more bad financial news about how wide the financial mess is. Stocks are lower on news that the International Monetary Fund will reportedly release new forecasts that suggest toxic assets in the US could reach about $3 Trillion, which is $1 Trillion more than the forecast three months ago. Investors will sell off stocks and move their money into more secure investments such as MBS. The more money coming into MBS the lowers the rates get on mortgage loans.
Friday, April 3, 2009
Mortgage Market News
Mortgage bond prices fell last week applying upward pressure on mortgage interest rates. The bond market continued to come under pressure from significantly stronger stocks. The DOW shot towards the 8,000 mark despite data releases that showed continued economic weakness. Most worrisome were the many reports that indicated people continue to lose jobs. Consumers find it difficult to spend without a job or with the fear their job may be in peril. The weaker than expected consumer sentiment data provided evidence of that fear.
Inflation is typically the most important focus for the mortgage interest rate market. Inflation remains a concern as the Federal Government continues to print and spend money in an effort to spur the economy. Unfortunately, mortgage interest rates also continue to be pushed around by gyrating stocks and weak demand as performance uncertainty looms and the Fed has become the primary buyer of mortgage-backed securities. Most of the recent increases in interest rates have come following stronger stocks. The Fed continues to pump billions of dollars into the market to try to keep mortgage interest rates relatively low and steady. Up until this past week they have done a pretty good job of accomplishing that task. Remember, the Fed is not the only player in the game and selling pressure continues.
The level of interest rates reflects the balance between the supply of money from investors and the demand for money by borrowers. Rising inflationary expectations and uncertainty about the performance of the debt cause investors to require higher rates of return on investments to compensate for the erosion of the principal that eventually is returned to them or the risk of non-performance. Regardless of inflation levels, though, rising economic activity can increase the demand for investors’ funds, and thereby lead to higher interest rates. Investors pulling money out of bonds and into stocks have recently pressured mortgage rates.
The demand for money diminishes as the economy struggles. The Fed lowers interest rates as an incentive to businesses and consumers to increase their borrowings. The Fed hopes manufacturers will increase their investments in plants, equipment and inventories and that consumers will push housing construction along with consumer spending and with that, consumer debt.
Analysts will monitor this next week’s consumer credit levels. There is much debate in the financial community about the future. Economists, market analysts, and traders all seem to have a different opinion about the future state of the economy and especially whether or not we have hit the bottom of the economic slide. One thing most market participants agree on is both the bond and stock markets are going to see additional volatility.
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.
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 give me a call if you have any financial questions or if you need a second opinion on a loan scenario.
Inflation is typically the most important focus for the mortgage interest rate market. Inflation remains a concern as the Federal Government continues to print and spend money in an effort to spur the economy. Unfortunately, mortgage interest rates also continue to be pushed around by gyrating stocks and weak demand as performance uncertainty looms and the Fed has become the primary buyer of mortgage-backed securities. Most of the recent increases in interest rates have come following stronger stocks. The Fed continues to pump billions of dollars into the market to try to keep mortgage interest rates relatively low and steady. Up until this past week they have done a pretty good job of accomplishing that task. Remember, the Fed is not the only player in the game and selling pressure continues.
The level of interest rates reflects the balance between the supply of money from investors and the demand for money by borrowers. Rising inflationary expectations and uncertainty about the performance of the debt cause investors to require higher rates of return on investments to compensate for the erosion of the principal that eventually is returned to them or the risk of non-performance. Regardless of inflation levels, though, rising economic activity can increase the demand for investors’ funds, and thereby lead to higher interest rates. Investors pulling money out of bonds and into stocks have recently pressured mortgage rates.
The demand for money diminishes as the economy struggles. The Fed lowers interest rates as an incentive to businesses and consumers to increase their borrowings. The Fed hopes manufacturers will increase their investments in plants, equipment and inventories and that consumers will push housing construction along with consumer spending and with that, consumer debt.
Analysts will monitor this next week’s consumer credit levels. There is much debate in the financial community about the future. Economists, market analysts, and traders all seem to have a different opinion about the future state of the economy and especially whether or not we have hit the bottom of the economic slide. One thing most market participants agree on is both the bond and stock markets are going to see additional volatility.
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.
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 give me a call if you have any financial questions or if you need a second opinion on a loan scenario.
Thursday, April 2, 2009
Changes to Mark to Market are coming.
For Months we have been saying once the Financial Accounting Standards Board (FASB) changed their stance on mark-to-market accounting there would be a large improvement in the ability of financial institutions to be profitable. Today FASB voted to relax the accounting methods financial institutions can use to mark assets. The big change is to allow financial companies to use alternate models, like cash flow analysis, in marking assets. This enormous change will significantly reduce the writedowns banks have been taking on investments like mortgage-backed securities. These writedowns had forced companies to sell good assets and write down bad one while they were still performing but the value of the asset (such as a appraised value of a home loan) had gone down.
FASB finally understood that there was still value in assets such as home loans if the loans were still performing. Today the stock market is up due to this ruling and we expect to see the market to rally off of this.
For mortgage rates this will be positive since investors will be willing to now invest in MBS (Mortgage Backed Securities) again and not have to worry about the forced writedowns of the FASB 157 ruling. Currently the Fed were the major buyers in MBS The Feds involvement in buying MBS had pushed rates down and now if there is additional cash flowing into MBS we can expect to see continued low rates and maybe more expansion of some mortgage products for homeowners.
FASB finally understood that there was still value in assets such as home loans if the loans were still performing. Today the stock market is up due to this ruling and we expect to see the market to rally off of this.
For mortgage rates this will be positive since investors will be willing to now invest in MBS (Mortgage Backed Securities) again and not have to worry about the forced writedowns of the FASB 157 ruling. Currently the Fed were the major buyers in MBS The Feds involvement in buying MBS had pushed rates down and now if there is additional cash flowing into MBS we can expect to see continued low rates and maybe more expansion of some mortgage products for homeowners.
2009 Tucson Home and Patio Show
Starting tomorrow the 2009 Tucson Home and Patio Show will be held at the TCC. I will be at the Nova Home Loan booth #1216 Friday April 3rd 2-8, Saturday April 4th 2-8 and Sunday April 5th 11-4. Stop by to register to win a $250 Target Gift Card.
I look forward to seeing you there.
I look forward to seeing you there.
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