I read this today, by Barry Habib, and wanted to pass it on..."One very important note – the Fed took the time to reiterate that their Mortgage Backed Security purchase program will end on March 31, 2010 as previously stated. There had been some speculation that the program might continue beyond the March 31st
date, but the inclusion of this reiteration in the Fed’s Policy Statement leads us to believe that the Fed is trying to make it clear that this program will terminate as scheduled. It’s important for us to get the word out to our clients, who may be banking on this program being available for a longer period of time."
Although I have no crystal ball, this does make us believe that we will see rates go up in 2010 if the Feds stop buying MBS. Those of you that have buyers wavering on buying still, (hoping that prices may drop more), may like to know that an increase in interest rates could offset any potential savings in their payment should prices dip. Also, anyone who may be wanting to refi, would probably benefit from doing so now while rates are staying down.
Thursday, December 17, 2009
Tuesday, December 15, 2009
Rates stay down, Fannie tightens guidelines
Rates continue to stay low with the 30 year fixed under 5%.
Lots of changes coming in for next year...but effective December 12th, Fannie Mae has put a max debt to income ratio of 45% on borrowers. So, buyer's total outgoing debt, including their future mortgage payment, taxes, insurance, HOA will have to be 45% (max) of their household / qualifying income.
This is going to lower a lot of pre-qualified borrowers' approval amounts and make it harder for others to qualify for what they want....but we can still look at portfolio lenders, FHA, VA and possibly some Freddie Mac products that haven't yet implemented this new guideline. So, a good thing to investigate with your borrowers. What they were pre-approved for last month may not be the case anymore.....
Dave
Lots of changes coming in for next year...but effective December 12th, Fannie Mae has put a max debt to income ratio of 45% on borrowers. So, buyer's total outgoing debt, including their future mortgage payment, taxes, insurance, HOA will have to be 45% (max) of their household / qualifying income.
This is going to lower a lot of pre-qualified borrowers' approval amounts and make it harder for others to qualify for what they want....but we can still look at portfolio lenders, FHA, VA and possibly some Freddie Mac products that haven't yet implemented this new guideline. So, a good thing to investigate with your borrowers. What they were pre-approved for last month may not be the case anymore.....
Dave
Tuesday, November 24, 2009
Monday Mortgage Update
Here is your Monday Mortgage Update: (On Tuesday)
1st FHA has pushed back (again) the elimination of “Spot Approvals” on Condos to February 1st, 2010.
Rates have stayed stable and low for most of this year, (and down to record lows again over the last few days) because the Feds are purchasing mortgage-back securities (MBS) weekly. I read an article in Mortgage News Daily this morning that explains what’s going on and the future…Here’s the highlights of the article: The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers.
This week's net purchases pushed the Federal Reserve's aggregate total over the one trillion dollar mark. Since the inception of the program in January 2009, the Fed has spent $1.02 trillion in the agency MBS market, or 81.8 percent of the allocated $1.25 trillion, which is scheduled to run out in March 2010.
So, the Feds, by purchasing these MBS, are keeping rates stable and low….only $228 billion left.
1st FHA has pushed back (again) the elimination of “Spot Approvals” on Condos to February 1st, 2010.
Rates have stayed stable and low for most of this year, (and down to record lows again over the last few days) because the Feds are purchasing mortgage-back securities (MBS) weekly. I read an article in Mortgage News Daily this morning that explains what’s going on and the future…Here’s the highlights of the article: The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers.
This week's net purchases pushed the Federal Reserve's aggregate total over the one trillion dollar mark. Since the inception of the program in January 2009, the Fed has spent $1.02 trillion in the agency MBS market, or 81.8 percent of the allocated $1.25 trillion, which is scheduled to run out in March 2010.
So, the Feds, by purchasing these MBS, are keeping rates stable and low….only $228 billion left.
Monday, November 16, 2009
Your Quick Monday Mortgage Update
- Rates continue to stay low!
- The investor community, Wells, Citi, and B of A are all tightening criteria for FHA and VA loans, including raising minimum credit scores. This is most likely the result of changes the FHA is making, and keep in mind FHA has terminated 8 lenders this year.
- California Association of Realtors reports that entry-level housing affordability reached 64 percent in the 3rd quarter of 2009.
Wednesday, November 4, 2009
closer to a tax credit extension
Hello all- Were moving forward towards a tax credit extension. CNN had this report regarding the tax credit extension.....I put the highlights below and a link to the full article below that. Keeping you posted! -
Senate throws a lifeline to the joblessLawmakers pass bill extending unemployment benefits by up to 20 weeks. Legislation also extends homebuyer tax credit into next year.
NEW YORK (CNNMoney.com) --
After weeks of partisan debate, the Senate voted on Wednesday to lengthen unemployment benefits by up to 20 weeks and to extend the $8,000 homebuyer tax credit. The measure now moves to the House, which passed its own benefits extension in September, giving an additional 13 weeks in high-unemployment states. The two bills must now be reconciled, though the House is expected to support the Senate's version. "Now that this legislation has passed the Senate, I will bring it to the House Floor for a vote as early as tomorrow," said House Majority Leader Steny H. Hoyer of Maryland. The bill would then move to the White House for the president's signature. Last week, the administration said it supports extending benefits. The legislation also would extend the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30. The controversial credit, which many say has boosted home sales in recent months, was set to expire after Nov. 30. The Senate's bill also created a $6,500 credit for those who buy a home after owning one for the last five years. That measure would apply to contracts signed by April 30 and closed by June 30. The current credit defines a first-time homebuyer as someone who has not owned a residence within the past three years. The Senate bill would raise the adjusted gross income cap to $125,000 for single filers and $225,000 for joint filers. The amount of the credit currently begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers. See the full article here: http://money.cnn.com/2009/11/04/news/economy/Extending_unemployment_benefits/index.htm?postversion=2009110418
Senate throws a lifeline to the joblessLawmakers pass bill extending unemployment benefits by up to 20 weeks. Legislation also extends homebuyer tax credit into next year.
NEW YORK (CNNMoney.com) --
After weeks of partisan debate, the Senate voted on Wednesday to lengthen unemployment benefits by up to 20 weeks and to extend the $8,000 homebuyer tax credit. The measure now moves to the House, which passed its own benefits extension in September, giving an additional 13 weeks in high-unemployment states. The two bills must now be reconciled, though the House is expected to support the Senate's version. "Now that this legislation has passed the Senate, I will bring it to the House Floor for a vote as early as tomorrow," said House Majority Leader Steny H. Hoyer of Maryland. The bill would then move to the White House for the president's signature. Last week, the administration said it supports extending benefits. The legislation also would extend the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30. The controversial credit, which many say has boosted home sales in recent months, was set to expire after Nov. 30. The Senate's bill also created a $6,500 credit for those who buy a home after owning one for the last five years. That measure would apply to contracts signed by April 30 and closed by June 30. The current credit defines a first-time homebuyer as someone who has not owned a residence within the past three years. The Senate bill would raise the adjusted gross income cap to $125,000 for single filers and $225,000 for joint filers. The amount of the credit currently begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers. See the full article here: http://money.cnn.com/2009/11/04/news/economy/Extending_unemployment_benefits/index.htm?postversion=2009110418
Thursday, October 29, 2009
Progress towards reversing HVCC
We are making progress in reversing HVCC. As most of you know HVCC has been a mess. Its caused so much difficulty dealing with appraisals, home values and has slowed the escrow process. Amendment 3126 will end HVCC. It still has to pass the House, the Senate and be signed off by the President. So, if you believe H...VCC should be reversed and you haven't signed this petition...please do so now. Its so critical to protect our industry and to benefit our clients. Here's the website. http://www.hvccpetition.com/
Article from CNN about the $8000 tax credit
$8,000 home credit still in play
Negotiations about whether and how to extend and expand the tax credit for homebuyers are moving quickly. Here are the latest developments.
NEW YORK (CNNMoney.com) -- Confused about whether lawmakers will extend the $8,000 first-time homebuyer credit and what it would look like?
That's understandable, since the situation is still very fluid.
Here's where things stand.
Support for the credit: There is still bipartisan support in Congress for extending the credit past Nov. 30 and making it available to more homebuyers.
The Obama administration wants the credit extended for a "limited period," Treasury Secretary Tim Geithner and Housing Secretary Shaun Donovan said Thursday. They did not elaborate.
What's on the table now: There appears to be a compromise deal that falls between the most and least generous proposals that have been put forth so far.
"There is bipartisan compromise to extend the credit through spring and expand it to existing homeowners who are stepping up to a different home," financial policy analyst Jaret Seiberg wrote in a research note for Concept Capital's Research Group.
The latest idea under discussion is a credit worth up to $8,000 for first-time homebuyers and up to $6,500 for homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years. (CNN: Senate compromise may be in the works.)
To qualify for the full credit, however, homebuyers must have adjusted gross income of less than $125,000 ($225,000 for married couples filing jointly).
In addition, the credit would only apply to homes sold for $800,000 or less. Contracts to buy a home must be signed by April 30, 2010, and the deals must close by June 30 in order for a buyer to qualify for the credit.
Rationale for extending the credit: Supporters of the credit say it has helped to boost existing home sales in recent months. Extending the credit would help further support sales, stabilize housing prices and generate jobs in the face of an expected rise in foreclosures next year, which is expected to put downward pressure on prices.
If the credit is allowed to expire, they say, the housing market and the broader economy will grow moribund again.
"The most fundamental argument for the credit is that nothing works in the economy if housing is falling -- it hurts household wealth and credit becomes tight," said Mark Zandi, chief economist at Moody's Economy.com. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."
What critics say: Though extending the credit has bipartisan support, it is not without its critics.
Critics, while acknowledging that the credit has helped to generate additional home sales, say it has been poorly targeted and therefore not cost-effective.
They point to estimates that only 10% to 20% of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30 bought solely because of the tax break.
In other words, a large majority of homebuyers who benefited from the credit would have bought their homes without it.
By one economist's estimate, the government may have spent $43,000 for each sale that occurred strictly because of the credit.
In a position paper published this week, the liberal Center on Budget and Policy Priorities said making the credit available to existing homeowners would not help stabilize housing prices or reduce inventory.
"When [they] purchase a new home, they simultaneously put their current home up for sale. As a result, there is no net effect on supply or demand in the housing market."
Timing on a vote: An amendment to extend and expand the credit could be attached to a bill that would extend unemployment benefits and which could pass the Senate by next week.
However, there's a chance the housing credit will be dealt with separately.
The credit could be attached to another piece of legislation or put in a standalone bill with other proposals to extend tax breaks.
Negotiations about whether and how to extend and expand the tax credit for homebuyers are moving quickly. Here are the latest developments.
NEW YORK (CNNMoney.com) -- Confused about whether lawmakers will extend the $8,000 first-time homebuyer credit and what it would look like?
That's understandable, since the situation is still very fluid.
Here's where things stand.
Support for the credit: There is still bipartisan support in Congress for extending the credit past Nov. 30 and making it available to more homebuyers.
The Obama administration wants the credit extended for a "limited period," Treasury Secretary Tim Geithner and Housing Secretary Shaun Donovan said Thursday. They did not elaborate.
What's on the table now: There appears to be a compromise deal that falls between the most and least generous proposals that have been put forth so far.
"There is bipartisan compromise to extend the credit through spring and expand it to existing homeowners who are stepping up to a different home," financial policy analyst Jaret Seiberg wrote in a research note for Concept Capital's Research Group.
The latest idea under discussion is a credit worth up to $8,000 for first-time homebuyers and up to $6,500 for homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years. (CNN: Senate compromise may be in the works.)
To qualify for the full credit, however, homebuyers must have adjusted gross income of less than $125,000 ($225,000 for married couples filing jointly).
In addition, the credit would only apply to homes sold for $800,000 or less. Contracts to buy a home must be signed by April 30, 2010, and the deals must close by June 30 in order for a buyer to qualify for the credit.
Rationale for extending the credit: Supporters of the credit say it has helped to boost existing home sales in recent months. Extending the credit would help further support sales, stabilize housing prices and generate jobs in the face of an expected rise in foreclosures next year, which is expected to put downward pressure on prices.
If the credit is allowed to expire, they say, the housing market and the broader economy will grow moribund again.
"The most fundamental argument for the credit is that nothing works in the economy if housing is falling -- it hurts household wealth and credit becomes tight," said Mark Zandi, chief economist at Moody's Economy.com. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."
What critics say: Though extending the credit has bipartisan support, it is not without its critics.
Critics, while acknowledging that the credit has helped to generate additional home sales, say it has been poorly targeted and therefore not cost-effective.
They point to estimates that only 10% to 20% of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30 bought solely because of the tax break.
In other words, a large majority of homebuyers who benefited from the credit would have bought their homes without it.
By one economist's estimate, the government may have spent $43,000 for each sale that occurred strictly because of the credit.
In a position paper published this week, the liberal Center on Budget and Policy Priorities said making the credit available to existing homeowners would not help stabilize housing prices or reduce inventory.
"When [they] purchase a new home, they simultaneously put their current home up for sale. As a result, there is no net effect on supply or demand in the housing market."
Timing on a vote: An amendment to extend and expand the credit could be attached to a bill that would extend unemployment benefits and which could pass the Senate by next week.
However, there's a chance the housing credit will be dealt with separately.
The credit could be attached to another piece of legislation or put in a standalone bill with other proposals to extend tax breaks.
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