Mortgage Discussion for the Panhandle area

Interest rates go up and they go down all the time. What is really surprising is rates are again at historic lows and no one seems to realize it. With all the news covering Bin Laden, Obama, the 2012 election, gas prices and the latest American Idol flub interest rates are a lost news item. I wish I could go out and shout it to every driver passing my office on Gulf Breeze Parkway, but then again I like my freedom and I am sure I would get arrested for something if I tried it.

Interest rates are very low today. I was checking pricing before writing this and for a FHA loan 4.25% for a 30 year fixed will get someone a home. That is incredible and you should make sure everyone knows it. With rates that low, some good deals on investment properties should be considered as well.

Our minimum credit scores have decreased as well. a 600 middle credit score will get you these awesome rates. Some minor conditions apply like no major lates in the last 12 months but that is still great news.

USDA or Rural Development is fully funded. We hear the rumors but the problems are with Rural direct and other agencies not our Rural Development Guaranteed loans. Just wanted to make sure that was clear. We are closing them daily.

As always we are ready and eager to help with any of your financing needs. Just give us a ring.

Spring is in the air and we have nice weather for that trip to the beach. Children are looking forward to summer break and houses are moving. What a paradise we have here on the Gulf Coast.

I am happy to report no tightening of the guidelines lately and in fact we have seen some guidelines loosen up. Hey, what we all need is more lending. More lending will equate to less inventory and better sales nationwide. We have decided to help by lowering our minimum credit scores to 600. This FHA loan should help a few more "on the fence" borrowers get qualified and close. Look at your past deals that could not close for credit score and give me a call. Hopefully we can turn some of them around and make you some money as well.

Please also keep in mind the time is short to save some money with FHA loans. On April 18th HUD has advised us the monthly FHA mortgage insurance premiums will rise from a factor of .9 to 1.25. This will make payments for all FHA loans to go up on that date. We must get them pre-qualified and a home identified by April 18th in order to close at the lower amount. Call me with any questions.

Call us if we can answer any questions or issue a pre-qualification for that new home.

Winter seems to have passed us by and the warm weather has arrived. Mortgage rates have come down a little and it seems like the market is picking back up. Mortgage closings are happening without any hitches and that is good news.

A lot of changes are happening in the mortgage market which seems like the normal course of operation these days. On April 1, 2011 our Federal Reserve has decided to "govern" the way loan officers get paid. You may know about the new Fed Rule but for those that do not here is a brief description. Come April 1st no loan officer anywhere (bank, mortgage company or mortgage broker) will be allowed to be paid based on production. In other words no commission pay or bonuses based on closed loans. This may seem like a good idea on the surface and we will see how it all works out but most experts believe it will lead to higher priced loans. Since the loans officer cannot "kick" in some cash to make a deal fly or compete with another mortgage outlet it will force just plain deals with no room to negotiate. Keep an eye on what happens next month as the whole lending environment will change.

Just in case anyone is a little out of touch with lending today let me assure you most things are the same. We still lend 100% on USDA (Rural Development) and VA. 97.5% on FHA and 95% for conforming loans. No real changes lately in fact we see some relaxing of guidelines here and there. This may lead to more closings in 2011 so that will help us all.

Warm weather is here so send us a deal and we will see you at closing.

I am very concerned about the new Dodd-Frank Financial Reform Law and the changes in April. I do not care how I pay my employees but at least let me know the law and how to conform to the law. Right now we can see mortgage lending shut down April 1 2011 if something is not done. Yes shut down, quit, stop, no fundings, no closings. I am sending links to TBWS daily that explaines it all. Please make sure you at least know what can come.

About 5 minutes a peice

Part 1 - http://www.thinkbigworksmall.com/mypage/archive/1/55197

Part 2 - http://www.thinkbigworksmall.com/mypage/archive/1/55198

Part 3 - http://www.thinkbigworksmall.com/mypage/archive/1/55200

Followup 1 - http://www.thinkbigworksmall.com/mypage/archive/1/57533

Followup 2 - http://www.thinkbigworksmall.com/mypage/archive/1/57758

Todays Followup - http://www.thinkbigworksmall.com/mypage/tbws

It is that time of year again and Baptist Health Care is holding their 18th Family Expo this Saturday at the Pensacola Interstate Fairgrounds from 9am to 3pm. The Family Expo FREE and has something for every member of the family. At this years expo the adults (and children) can get free health care screenings such as blood glucose, heart and stroke risk assessments, cholesterol checks and more. The young adults and teenagers will enjoy the latest electronic games on big screens with Wii, Playstation 2&3 and Xbox 360 games. With 17 game ports in high definition this experience will certainly be a big hit. Then the younger childern will enjoy face painting, Sponge Bob Spacewalk, live stage entertainment, outside sporting activities and on and on. Why spend good money to entertain the household when right up the road is a host of activities for everyone for free.

Along with all the fun at the expo there will be plenty of vendors showing what they do for Pensacola. Amoung them will be America's Mortgage Experts supporting the event and making sure everyone knows rates have plunged down into the 4's for a 30 year fixed interest rate. Drop by our booth to say hello and you heard about the Family Expo from my blog.

This will truly be a fun day for the family. While I know college football has started and Saturday will be a big day, the rest of the family will be very happy you recorded the game and spent time having fun with them. So please mark your calender to spend a fun filled day with Baptist Health Care and your Pensacola neighbors.

For more information click here: Family Expo 10.pdf

Wow, it has been hot. I am not speaking of the weather either. Interest rates and business have been so good lately I have not completed my Blog in a long time. Let me catch you up on what is happening mortgage wise.

USDA is finally being funded and we should have our automated underwriting back soon. The funding fee has been increased from 2% to 3.5% but at 100% we will take what we can get. This is very good news as the manual underwrites for USDA have dampened our ability to close the less than perfect deals but the new underwriting system will get us back to normal.

FHA is in the news with some new provisions being considered in congress. Most we could agree will be good for the industry like simple new underwriting guidelines making FHA loans easy to understand. Congress is also considering raising the down payment guidelines for credit score less than 620 to 5% score less than 580 to 10%. This sounds like a good idea but no one is funding the lower credit scores any longer so I am not sure what impact this will have. The last consideration of the FHA product is one we all need to get involved in. The congress is considering lowering the seller paid closing cost on FHA loans from 6% to 3% of purchase price. This is something we should all be against. Over a nationwide aspect this is not a fair change. As most everyone is aware Florida has some taxes paid on purchases that cause the closing cost to be inflated over many other states. Our taxes potently raise closing cost in out state 1.25% over a state like Alabama. This amount would mean in Alabama the 3% could cover all closing cost for a buyer but in a state like Florida where the taxes on a purchase are higher the buyer could be faced with paying $1,250.00 more on the same $100,000.00 purchase. If you agree with me go to http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480b1a605 where HUD is taking comments on the proposed regulation changes. Get involved now.

The last positive of this Blog is the LOW RATES. We have hovered around 4.5% for some time now with no true sign that will increase soon. This is a true Historic low and all your borrowers need to stop fence sitting and get a home today.

Please call with any questions for to pre-qualify your borrowers.

As we are all aware the number of foreclosures in our Nation still drag down home prices. What if more people could buy these homes? What if they could get help with down payment and special financing? Would that help keep values stable? This economy has put a great deal of pressure on bank REO departments to sell homes and we can all take advantage.

Fannie Mae is selling foreclosed properties with special financing under a program called Home Path. They allow up to 97% financing, no mortgage insurance and no appraisal. They will even help pay up to 6% in closing cost and the 3% down payment can be a gift. Just go to http://www.fanniemae.com/homepath/financing/index.jhtml go get more information and find out what homes qualify. My office is a Home Path approved lender so let's close some.

Freddie Mac has a similar program with special financing and will also be aggressive in selling homes. Just go to http://www.freddiemac.com/homepossible/hp97.html for more information on this Freddie Mac Version. My office is also approved for Home Possible Financing opportunities.

Another bit of help comes from some Federal Funds called Neighborhood Stabilization Program. This program, similar to SHIPP, allows Federal Funds for use in down payment, closing cost and in some cases even principal reduction. This program used in conjunction with Home Path, Home Possible, FHA, USDA, VA or any conventional loan gives us another boost in buying power. Learn more about this and more available funds at http://www.santarosa.fl.gov/housing/ and Yes, again, America's Mortgage Experts is approved to help with these funds as well.

As you can see Fannie and Freddie along with the Federal Government is pushing to help move these properties. Learn what you can and call us for any questions or to allow us to help your customer find that perfect deal.

As many of you are aware the Federal Reserve raised the discount rate by .25% yesterday. The discount rate is now .75% and marks the first time since June 2006 that the Fed. raised this rate. The media was very quick to point out that this discount rate was not the "short term interest rate" that effects rates such as Prime Rate for credit cards or mortgage rates. Well, is that true?

I am looking at rate sheets for this morning and realizing how wrong the media is on a daily basis. What make us think the banks are going to pay .25% more to borrow money and NOT pass along the cost to the consumer? Either we really have nice, thoughtful banks that would never do anything to get the American people in a mess like this or we are just being fooled again.

Let us not be fooled any longer and try and get the word out that great things are happening in real estate today. We all need to act quickly and get in on the ground floor. Yes, this was a true sign that interest rates will be moving up. I, however, do not believe that is a bad thing. It may serve us all very well. Think about the "fence setters" who have been watching for a sign of better times. Think about that young couple wanting to buy a home but waiting for rates to hit the impossible 3%. Will they move now on a new contract? Will that reluctant investor get off the fence and start buying?

I think these questions are up to us in the real estate business. Will we market successfully against the main stream media and get the positive word out or will we all talk about the good old days and allow this opportunity to pass?

I for one want to take advantage of this market and close many good loans the next few months. All I ask of you is help me market the truth about what is happening in real estate and of course send your customers here for a mortgage quote.

As Mardi Gras is in full swing and 2010 purchase contracts begin to close, I wounder which is sweeter. A king cake (and finding the baby) or a real estate closing? I guess if you break it down a King cake adds calories and a choking risk and a closing adds money. That being the case I will for go the parades, beads and sweets.

Short sales seem to be one area that is bogging down the real estate market. Buyers think they can wait it out and get a great deal leaving homes stagnate on the market. In the end they normally do not get any better deal than a normal sale. Why do we not as an industry try and educate the buyer that the time to buy is now and you will loose the tax credit if you wait for that "pie in the sky" deal?

I tell my customers that between the tax credit and other government treats, that waiting on the best deal my very well cost them in the long run. Just think SHIPP, Neighbor Stabilization, and many other housing programs are currently funded but for how long? We got news today that the Federal Reserve will ease then stop helping the financial industry in the form of buying Treasuries. That will raise rates itself without the Fed raising rates boldly. If a customer signs a contract today for a short sale they will, more than likely, loose the tax credit, any down payment assistance and the lower rates. Is it really worth it?

The mortgage industry is moving and it is hard to get an idea what direction we are going. I alerted you last blog of the tightening for FHA loans coming. We also see more strength in jumbo lending and Beach (resort) lending which could be looked at as loosening of credit. We will have to watch over the next few months and see.

100% deals (USDA and VA) are still closing and FHA will not change until April. We are still closing FHA down to 580 credit score with good last twelve months. Jumbo are also picking up as those with higher incomes are getting restless now. Send me your deals and we will find a way to close them.

The mortgage industry is trying hard to find an identity to hold. Problem is, this is a ever changing market with influence in all different directions. We all need to be aware of changes and proposed changes that will affect future decisions. I want to discuss some of these changes so we can prepare.

You may already be aware but as of Jan. 1st 2010 we started using a new Good Faith Estimate. This monster is just stupid and very confusing for customers. The government says they wanted to make the GFE easier to read and did just the opposite. For example, the new good faith does not itemize fees like the old GFE or a HUD-1. The new GFE does not include some important information like the old GFE. It does not give you a PITI (Principal, Interest, Taxes and Insurance) payment and does not mention the cash needed to close. In one hand, I like it because I do not have to explain every fee any longer the fees just do not show up anywhere but a total. One the other hand, closings will be a trick because that is when the itemized fees will show and there will surely be questions. The first week of January I just said "no big deal, I will give my customers the old GFE along with the new one the law requires." Wrong again, I was informed that HUD will not allow us to give out any form similar to the old GFE. I wanted to make sure my customer and realtors would see the itemized fees, PITI payment and the cash needed for closing but our government said I cannot show these items. This really does not make sense to me.

The home buyer tax deductions for first time home buyers and non-first time home buyers is set to expire on April 30th. This is a change we all knew but now time is running thin. I wanted to remind everyone this date is getting close.

Another date to make sure you are aware of is April 5th. On this day FHA will increase the up front mortgage insurance premium from 1.75% to 2.25%. This will raise payments and make qualifying just a little harder for some on the fence customers. The increase was needed to sure up the FHA insurance program against the current losses in the real estate market.

Most everyone is aware of HVCC or Home Valuation Code of Conduct but did you know on February 15th all FHA and USDA loans will follow the HVCC guidelines? This will mean no matter what type of mortgage loan (Fannie, Freddie, FHA, VA, USDA, Reverse and Construction) no one will be allowed to pick a certain appraiser for any reason. This sounds on the surface like easy and a fair check and balance but dealing with the process for months now on conventional loans I will tell you it is a mess. As an example, all appraisals must be paid for by credit card. No checks at the door anymore. What if your customer does not have a credit card or does not have $425 in room on a credit card? No more lookups to see if the home would likely appraise. You either pay the full fee or don't.

Other FHA proposed changes that currently do not have a date will include changing the maximum seller paid closing cost from 6% to 3%. This will force new home buyers to have that much more cash to close if the changes are approved. Another change being seriously looked at is raising the minimum down payment from 3.5% to 5% for high credit score borrowers. Those with credit scores below 660 will need up to 10% down payment for an FHA insured loan. Again these are proposed changes but will greatly impact a customers ability to purchase if acted upon.

Wow, this is a rather long blog for me but there are dates and changes we all need to be prepared for coming up. We are still closing FHA loans with as little as 580 in credit score. Our USDA loans are still moving many people into new homes and Santa Rosa County has new SHIPP funds available. Please call me if you have any questions.

Please send me some new customers so we can close before the changes.