USDA changing Loan Guarantee costs!

By Todd Abelson NMLS #180858 on .

Effective October 1, 2011 USDA is making two changes to their Loan Guarantee costs.

First the good – the Up-Front Loan Guarantee fee is being reduced from 3.5% to 2.0%

Now the bad – like FHA, they will start charging monthly mortgage insurance at an annual rate of 0.30% (FHA currently charges 1.15%)

Loans that do not have a  “Conditional Commitment” by Sept. 30, 2011 will fall under the new fee guidelines – NO EXCEPTIONS!

INFORM YOUR CLIENTS ! If they are buying a newly built home, make sure they request their Lender to have their Guarantee Fees locked in.

Any questions? As always, I’m here to help!

Call Todd Abelson for all your Mortgage needs! (520) 331-LEND (5363)

The “Uniform Mortgage Data Program” for Appraisals

By Todd Abelson NMLS #180858 on .

Under the direction of the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac (the GSEs) have developed the Uniform Mortgage Data Program (UMDP) to enhance the accuracy and quality of loan data delivered to each GSE…

FOR CONVENTIONAL LOANS DELIVERED TO THE GSEs ON/AFTER MARCH 19, 2012 (and with loan application dates on/after December 1, 2011), Fannie Mae and Freddie Mac WILL REQUIRE appraisals to be completed using the new field-specific standardization requirements…

Now my take – while this implementation SHOULD help “level the playing” field between geographies, Appraiser’s unique styles, housing markets, etc. and make it easier for INVESTORS (Wall Street or otherwise) to know what they’re getting it will definately have some down sides:

1. Appraisals are 80% science, 20% Art. The “art” is very often what make the report make sense

2. Fitting nicely into a Bell Curve makes statisticians happy, but what if you’re at either end of the curve (high or low)? You’re in trouble.

3. Trying to be all things to all people usually makes more problems than it solves.

So where does that leave us? First, the current style of appraisal report is being revamped so you won’t be able to tell the players without a scorecard. Get a copy of the “Fannie Mae and Freddie Mac Uniform Appraisal Dataset Specification (UAD)” document for study and reference. Next, inform your clients that it will be better if they can submit a loan application BEFORE December 1st if possible. Finally, prepare for some extra time to close since every lender will be gearing up for this (and they’ve already started).

More “fun and games” in the Mortgage Industry — but fear not because I’m on the case!

Call Todd Abelson for all your Mortgage needs! (520) 331-LEND (5363).

Reduced FHA loan limits in Arizona as of October 1, 2011?

By Todd Abelson NMLS #180858 on .

Unless subsequent regulation is passed to further extend the temporary loan limits, the temporary high balance loan limits defined by the American Recovery and Reinvestment Act of 2009 (ARRA) will expire on September 30, 2011.  This is generally being viewed as going by the NOTE DATE – loans with a NOTE DATE on or after 10/1/11 must use the lower limits.

Each investor may make different rules that may require an earlier funding or lock date or a final delivery date.  Please be advised that any applications for a loan amount between $271,050 and $316,250 (in Pima County) will need to lock, close and fund BEFORE 9/30/11 to be safe.  This is not based on CASE NUMBER ASSIGNMENT DATE! 

ALL OF ARIZONA WILL BE AT THE FLOOR LIMIT OF $271,050 except Cococino County which is $333,500

To further complicate matters the current floor of $271,050 may go down at the end of the year.  BTW – The $271,050 is based on 65% of the Conforming loan limit from before 2009.  This year the conforming loan amount is subject to change and just like every year before 2008 will go up or down based the median home price in the US.  If I was to bet on this I would have to say they will likely go down.  The conforming limit of $417,000 may be extended further but no one knows.

Call Todd Abelson at Sunstreet Mortgage for all your financing needs! (520) 331-LEND

The day after the Fed meeting and…

By Todd Abelson NMLS #180858 on .

…they didn’t raise rates. This was a unanimous vote of the Committee.

More importantly, during Bernanke’s speech he confessed that even he was more than curious why the Economy is still in the duldrums and the recovery “frustratingly slow”.

On the Inflation front the Committee pledged to keep rates low for an extended period (a term the Bond markets liked). Indications are it will take another 2 or 3 Fed Meetings before they will consider raising short-term rates, which should take us close the the end of 2011.

On the Monetary front they announced that QE2 would end as scheduled on June 30th with no mention of QE3. The Stock markets reacted very badly to this news in that both QE1 & QE2 have been leading reasons for gains in the market. Once removed, what will happen? The Dow shed 180 points yesterday and is currently down another 215 points.

So the actual news was kinda-sorta what we expected and the Bond market pretty much took it in stride. Now while stocks give up recent gains, rates have improved… but for how long? Volatility still reigns supreme.

Call Todd Abelson at (520) 331-LEND (5363) for all your mortgage needs!

Fed’s meeting minutes to be released today…

By Todd Abelson NMLS #180858 on .

So the topic on every Investor/trader’s mind is “what will the Fed say when their statement is released?”

Is the economy going good/bad, stong/weak, sideways/forwards/backwards?

Will there be a “QE3” program or do they capitulate that Monetary Policy has failed and now only Fiscal Policy can save the day?

Are they going to accelerate the sale of Gov’t holdings to recoup some of the money invested from QE1 and QE2?

How long is “transitory” when Bernanke says the current inflation we’re witnessing is transitory?

Will they, in fact, raise short-term interest rates this morning?

Is there ANY CHANCE we’ll step into the Euro-debt crisis?

Is the bad news not as bad as we think, which makes it good news? Or is the good news not as good as we hoped, which makes it bad news?

My head hurts!

Any way it goes, there will definately be some sort of knee-jerk reaction as Volatility reigns supreme. So tighten your seatbelt and hang on for the ride!!!

Todd Abelson, Licensed Mortgage Professional, (520) 331-LEND (5363)