Where is my mortgage relief?

Just when I thought my ‘drama factor’ for the week had been accomplished squashing my three year old’s meltdown over which shoes to wear, the Galleria area near our office was swarmed with helicopters and FBI agents on the roof of the Stanford Financial building. What a shame that is, seeing the destruction of yet another financial institution. Can we trust anything anymore? And then the first article on CNN Money today was “ Expect a wave of bank failures’. That may be the case, but for me , personally, I can express that I have never felt more job security in my 14 years as a mortgage originator. And I work for a bank. Patriot Bank is steadfast and strong. Not only are we the 6th largest bank domiciled in Houston, but we have been profitable since our 5th month in business after opening in March of 2005. The year ending 2008, we generated more than 4 mm in net profit, and we maintain < 1 % of net loans charged off as a percentage of loans outstanding. Not only that, our asset to debt ratio exceeds the limit set by the FDIC as a minimum bank requirement. Please know that at Patriot, we are your trusted source in mortgage lending. And we are here for the long haul.

Changing the subject……….Where is my mortgage relief? I pay my mortgage on time, and sometimes we struggle. I could use some relief! Oh, wait a minute. I need to be 3 months behind on payments to get any relief, like a lower rate, or payment, or renegotiation with my lender. At first thought, that bothered me. Should we really destroy the incentive to act responsibly? Capitalism will not work without the possibility of failure!

But a guest on CNBC Sqwak Box yesterday summed it up nicely ‘ The Kool Aid has been flowing freely for a long time, and we all drank it”. Boy did we ever! We have all benefited in some way, whether it be cashing in on our home equity, selling our house at a rock star value , stock profits, the car loan at 1.9%, the 0% credit cards, etc. If we do fail, foreign investors will lose confidence in our system. Their investments in our economy has kept us going, believe it or not. And our home values. If we allow our neighbor to foreclose, the values in our neighborhood decline. So you see, my part in all this is to continue to do the right thing. Pay my mortgage since I can, and allow those that need it, and have hardship, to benefit from the policies of recent that have been put in place. We will all be rewarded some day, when this is behind us, and we have learned the larger lesson , which has yet to be defined.

To clarify my article of last week, the First Time Homebuyer Credit of $8,000 is not required to be repaid. A first time homebuyer is defined as anyone who has not owned a home in the last THREE years.

Product of the Week: Check out the 5 and 7 ARM Jumbo Rates below! 4.75% !

First Time Homebuyer Tax Credit

Love. It does make the world go around, doesn’t it? Let us temporarily forget in its bliss? My hope for you on this day is that you find the love you have always been looking for! As for the mortgage business, there is not much love to be found, or so it feels sometimes. We have good days and bad days. But for the most part, really, it is still good.

Things are starting to look up for home buying! Rates have come back down to historic lows. Still not quite as low as early January, but low. Where is the 4.25% I keep hearing about? That should tell you something, hearing……..In other words, should we hold our breath? Let’s enjoy the 4.625% of today!

The stimulus package that has passed Congress (to be signed into bill tomorrow) has some important changes to the First Time Home Buyer Tax Credit. It is raised to $8,000. It does not have to be repaid if you live in the home at least 3 years. It is extended to Dec 2009. A local/state government agency may advance the credit to home buyers for closing. This is the clause I would like to see more detail on. We still do not know which government agency this would be. It will be an awesome task, to say the least, to advance this credit. As I hear more detail, I will surely pass it on.

Changes for investors? Currently, Fannie Mae limits the TOTAL number of properties an investor can finance to 4 (including their homestead). It has forced a huge decline in investment property financing. We need investors to help us gobble up these foreclosures! There is a rumor this may be reversed back to 10. There is no confirmation yet. Stay tuned. That would surely put the love back in the air for some of us.

Wishing you and yours a wonderful Valentine weekend! I am here now with my little kiddo in my arms. Nowhere I would rather be. Off to watch my 100th episode of Monsters Inc…………..

How Stimulus Package Affects Housing

Another exciting week, as rates were up down, up ,down, and finally down .25% from last week. Will we ever see 4.0%? I don’t know, but if it makes sense right now to buy or refinance, do it. That is my ongoing advice.

There is rumor that a $15,000 homebuyer credit has been approved in the Senate. I have not been able to confirm , but I know it is looming. Currently, there is APPROVED a $7500 tax credit that is given at the time they file their taxes. So, if a first time homeowner (who makes less than $75,000/year) buys before July 2009, they can claim this credit for 2008 (if they file an extension) or on 2009 tax return (a whole year from now!). The credit offsets the tax they owe, and is required to be repaid over 15 years. So basically, and interest free loan.

The NEW PROPOSAL posed to the Senate as a part of the stimulus package is: Increase the credit to $15,000 (or 10% of the purchase price if less), and available to ALL homebuyers, regardless of income or purchase history, and not require repayment. Wow. That would spur some buying for sure. I will just avoid thinking where that money will come from for now. Let’s just take a bat for the team on this one, and call it a good thing.

I saw an article online that said ‘Credit Standards Tighten’. Where has that journalist been? That is old news! Yes, it is true. There are more rules, more paperwork. But we just get through it all somehow. The funniest example I have is one of our investors now requires that any letters of explanation for the borrower are handwritten, not typed. Hint: loan officers have really good writing skills. But isn’t that funny? We are going to such extremes. But again, a bat for the team. When I am 80, I hope to look back on 2009 with a grin, and know that I helped a lot of people accomplish the American dream of homeownership.