A Little Fed and a lot of FHA

I heard the Tavern on the Green in Central Park is or has just closed. Here is a picture I took while there last September. Many people remember this place by the manicured animal shapes like this one.

The Fed says that the Fed’s Mortgage Backed Securities purchase program (see previous post), will end March 31st.  Overall this news was taken bad as rates got a little worse yesterday.

Also in a previous post, I commented on FHA changes.  Well it looks like the date for the increase in up front mortgage insurance (UFMIP) is April 5th.  The increase, just days after the Fed stops buying MBS’s, takes the UFMIP from 1.75% of the loan amount to 2.25%.  If you look at a $300,000 purchase price, and use FHA with the minimum 3.5% down, after April 5th your UFMIP will be $1,582 higher!  This is can be a problem for a lot of people.  I know, because I see how people struggle to save just enough for a down payment and closing costs.

It is true that UFMIP can be, and usually is financed into the loan amount, how ever that means higher payments.  While the impact to payments is low, those buyers who are already on the border for qualifying will be affected.

At some point the cap for seller credits will come into play as well.  Currently a seller can credit 6%, but FHA will shrink that to 3% sometime soon.

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Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine

2151-A2 Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119
Fax 925-940-9639

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

Fed Getting out of the Market

Only 12 weeks remaining of the Fed MBS purchasing program.  I’ve blogged this before but let’s recap.

The fed planned to spend 1.25 trillion dollars buying mortgage backed securities, which are really just bundles of loans, like yours, that are sold on a secondary market, like stocks and bonds.  They have spent over 1 trillion and with only 12 weeks remaining will be winding down this program.  Why should you care?

Since the secondary market is like any other and responds to supply and demand, when there is less demand, investors will need to be enticed to buy.  How do you do that?  With larger returns.  In this case returns are created by the interest rates, so you can see that higher rates will be needed.  This is of course passed on to the consumer, meaning home loan rates are expected to go up. 

If you or anyone you know has been on the fence, to buy or refinance, time is running out.  We may or may not see one more dip before the 12 weeks is up, but rest assured that unless the Fed extends the program, rates will go up.

Couple higher rates with foreclosures and short sales, we can expect a slight loss in the (small) gains we saw late last year in housing prices.  As rates go up the buyers lose purchasing power and are less likely to buy higher priced homes. 

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Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-A2 Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

Changes to the Good Faith Estimate

January 1st marks the start of a new year, new decade and among other things the start of a new good faith estimate.  New laws require lenders to use the 2010 version of this form.  Created to allow easier shopping for consumers, this form is 3 pages instead of 1 and does not even show the consumer how much cash is needed to close, or any credits that may be given from Realtors, sellers or the lender.  This rules are very strict as to when it must be presented to the borrower and to what fees can change after it has been given to the borrower.  In short, it is a disaster for lenders and will result in higher fees, as lenders try to understand the changes and fear they will be stuck footing the bill of estimated 3rd party fees that change or were not disclosed properly at the beginning. 

For example, let’s say a lender put a $400 fee for an appraisal and later that fee is really $450.  Basically the lender is stuck paying the difference as they had only disclosed $400.  Adding up the amount of fees that this can happen to means the lender could potentially be responsible for thousands.  I don’t need to tell you that lenders will not want to do this and therefore will be padding fees from the start.  Expect this as a new norm, at least until several loans are under the belt and lenders get used to the changes.

All lenders are undergoing training on this form and I have as well, with a 2nd session next week.  Though the above is already a conclusion taken by most lenders.  Leave it to the Government to take a 1 page form and turn it into a 3 page form, in order to make it easier, but only to make it more convoluted.  *sense the sarcasm*

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Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-A2 Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119
msteinmetz@envoymtg.com

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Apply for a loan online

 FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

Homebuyer Tax Credit Extended!

The House and the Senate have passed the extension of the Homebuyer tax credit and made some changes.  The President is expected to sign it into law tomorrow.

For 1st time buyer’s or those who have not owned a home in the last 3 years, the tax credit is $4,000 for singles and $8,000 for couples, with income restrictions maxing out at $125,000 for singles and $225,000 for couples.

Current homeowners, who have owned a home for 5 of the previous 8 years, can now also get a credit of $3,250 for singles and $6,500 for couples with the same income restrictions. 

Purchase agreements must be signed by 4/30/2010 and close by 6/30/2010

Those in the armed forces, stationed outside of the U.S. on official duty for 90 days during the period of 1/1/2009 – 5/1/2010 have an extended time frame for signed purchase agreements to 5/1/2011 and closing to 6/1/2011.
 

Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-P Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119

Visit my blog for my most recent mortgage related update.

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

Pick your own escrow

AB 957 Galgiani (D-Livingston) This law will mandate that buyers of foreclosed homes would have the choice of using a local escrow office to handle the transaction. It also prohibits a seller of residential property from requiring the buyer to use an escrow service company or purchase title insurance chosen by the seller and would also prohibit a seller of residential property from, without good cause, disapproving the use of a title or escrow company chosen by the buyer.

This is Good News!  If you have been involved in a purchase of a foreclosed home, you know that the escrow companies were forced on you by the seller.  These companies, for the most part, were out of the area, over worked and simply not caring to your needs, since their client was the bank with the foreclosure.  Terrible service is usually accompanied with these transactions.  Now you can choose your own escrow company, a local company that you or your agent/lender has a relationship with.  One that will care for your needs.

A small victory but one that helps!

 
Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-P Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

Possible Changes Underway

• The Senate is looking at Bill to extend the first time buyer tax credit for service members, who served over seas.

The National Association of Realtors is out there trying to make some significant changes that will help the industry recover. 

1. Trying to keep the higher loan limits for FHA permanent
2. Trying to eliminate the owner occupied ratio on condo complexes.  This is big because, you currently cannot buy a condo using an FHA loan if more than 51% of the units are not owner occupied.

It’s great to see people trying to create change.

Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-P Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119
Fax 925-940-9639
msteinmetz@envoymtg.com

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

Rates are looking Great!

Rates are 1/8% from the lowest rates ever!  Should we be talking about your possibilities?  Call me today.

Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-P Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119
Fax 925-940-9639
msteinmetz@envoymtg.com

Visit my blog for my most recent mortgage related update.
Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

Credit Scores still more important than ever

In the last year or so, the minimum credit score for most lenders jumped from 580 to 620. I have been posting about the need for good credit for a long time, and now it becomes even more important. The word on the street is that the requirement is going to be raised yet again, up to 640.

If you, or anyone you know need tips on how to keep your credit good, or increase your score, please contact me.

Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-P Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficent Mortgages

Unemployment up to 9.7%

The latest job report came out last week. It appears all of the positive news that has been all over the web and news channels, is premature. 9.7% unemployment is the highest in 26 years.

Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-P Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficent Mortgages

Energy Efficient Mortgages

This loan gives you extra cash to complete energy efficient improvements in your home.  This loan is similar to the FHA 203K streamline loan, which is a larger scale  rehab loan, but the EEM (Energy Efficient Mortgage) lends up to $8,000 maximum.  The 203K and EEM can be used together. 

Just in case you were not aware of this little program here is some information about the the Energy-Efficient Mortgage.
-Finance up to 15% of an existing home’s value or 5% of a new homes value
-The monthly energy savings are added to your income, to help you qualify
-There is a 3% minimum investment required by you, but rebates and other incentives from the governmanet may be applied toward your contribution.

Some items you can use the money for are:

• Windows and Doors
• Heating and Cooling
• Insulation

If you’d like to know more, contact me today.

Also, feel free to Share or Comment

Thank you,

Matt Steinmetz
Envoy Mortgage
2151-P Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119
Fax 925-940-9639

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

Contra Costa County, home loans, mortgages, Concord, CA, refinance, rahab loans, 203K, FHA