Where is the love this Valentine's Day? Today Obama released his plan to 'phase out' Fannie Mae and Freddie Mac. Below I will summarize some points for you, but you can read the article here: http://money.cnn.com/2011/02/11/news/companies/fannie_mae_freddie_mac_white_house_proposal/index.htm
By 2018, Fannie and Freddie are planned to be essentially gone. It’s hard to imagine what 'private equity' they expect to handle the trillion dollar market. Not to say change is not necessary, but I hope the extra money they are looking for will enter into our market. Will it be the Chinese or the Saudi's that close the gap on our market? Is that what kind of 'private' equity they are talking about? Will America be America anymore? I heard a foreign buyer is looking at buying the NYSE...seriously?
Back to Fannie Mae, there are some sentences in the above article that caused me to pause. Phrases like: "recommends requiring Fannie Mae and Freddie Mac to price their loan guarantees to the same standards as private banks". So...does that mean to charge higher yields? Private bank portfolio loans usually come at a cost. Hmmmmm.... With regulatory changes coming this April 1, the cost of loans is set to increase anyway (this is my opinion) with the increased cost to lenders. It will pass off to the borrowers.
Other phrases bothered me like: "Increasing down payment requirements in order to shrink Fannie and Freddie's portfolio". In other words, to phase them as market players over the next (couple) of years. That will really help dig us out of the recession.
"Increase premiums on FHA loans by .25%". Fact: they already have done that this year! The cost to borrowers for these low income loans has already increased about $20/mo on a $100,000 loan. That is a lot of money for many people. How again will this help support homeownership and encourage families to buy a home? Increase the cost? Will it be affordable?
Lots of questions left unanswered this week, I know. Sorry! I am just going to keep plugging along, implementing and improving my systems to WOW our clients and referral partners, and close as many transactions as I can! Today. One thing is for sure, there will be a mortgage market, there has to be! For the lucky son of a gun that gets creative and provides this 'private equity' Obama is talking about...more power to him. I'll be ready.
Enjoy the beautiful weekend!
BHBK (Big Hug Big Kiss) this Valentine's Day.
Jennifer
RATES as of February 11, 2011 (UP FOR THE WEEK)
The following assumptions apply:
20% Down Payment (Conforming) / 25% Down Payment Jumbo (Lower down payments available – call for details)
1% Origination Fee
Escrows Required (if no escrow, higher fees may apply)
Purchase Transactions, Primary Residence (Refinances have different rates)
30 day closing
Credit Score 740 +
Debt to income ratio <=40%
Full Documentation of Income/Assets
Conforming ($200,000* - $417,000)
Jumbo ($417,001- $1,000,000*)
30 year (fixed) 5.125% APR 5.260%
30 year ( fixed ) 5.875% APR 5.997%
15 year (fixed) 4.375% APR 4.602%
15 year ( fixed ) 5.250% APR 5.425%
5/1 ARM 3.875% APR 3.625%
7/1 ARM 4.375% APR 3.935%
5/1 ARM 4.000% APR 3.654%
7/1 ARM 4.250% APR 3.857%
10/1 ARM 5.250% APR 4.652%
FHA/VA call for quote (max loan $270,000)
We do originate loans below $200,000. These amounts are chosen to show the most favorable rates.
For other product options or for loan amounts less than $200,000 or above $900,000 please call for quote.
Call for details!
If you know of someone who would appreciate my services, please contact me with their name and number and I will be happy to help them!
Monday, February 14, 2011
Friday, February 11, 2011
Belated IRU
This weeks’ note will be quick! My new assistant (5 year old Diego came with mommy to work today) and he just informed me that it’s time to go home…….
Rates are up for 3 days in a row! Why? Instability in Europe, most specifically there are fears of inflation as food and energy prices are increasing. The ECB yesterday said they are not going to rise the interest rates, but the markets aren’t going for it, as inflation seems to already be on the rise. So bond markets reacted.
On our home turf, there were mixed signals today, which isn’t good market news either. Only 36,000 jobs were created in January, while 148,000 were expected. Normally that would lower rates, but with news of increased hourly wages (up .4%) and unemployment claims down, it signaled to the markets that we are slowly but surely recovering.
Don’t let your buyers and sellers be discouraged by short term spikes in rates! We are still at historically low levels of interest rates. And, we live in one of the most prosperous cities in the country.
Have a safe and warm weekend, and remember, we can still close loans in 3 weeks or less!
RATES as of February 4, 2011 (UP .25% FOR THE WEEK)
The following assumptions apply:
• 20% Down Payment (Conforming) / 25% Down Payment Jumbo (Lower down payments available – call for details)
• 1% Origination Fee
• Escrows Required (if no escrow, higher fees may apply)
• Purchase Transactions, Primary Residence (Refinances have different rates)
• 30 day closing
• Credit Score 740 +
• Debt to income ratio <=40%
• Full Documentation of Income/Assets
Conforming ($200,000* - $417,000) Jumbo ($417,001- $1,000,000*)
30 year (fixed) 5.125% APR 5.258% 30 year ( fixed ) 5.875% APR 5.997%
15 year (fixed) 4.250% APR 4.476% 15 year ( fixed ) 5.125% APR 5.326%
5/1 ARM 3.625% APR 3.535%
7/1 ARM 4.000% APR 3.751% 5/1 ARM 3.625% APR 3.520%
7/1 ARM 4.000% APR 3.737%
10/1 ARM 5.250% APR 4.552%
FHA/VA call for quote (max loan $270,000)
We do originate loans below $200,000. These amounts are chosen to show the most favorable rates.
For other product options or for loan amounts less than $200,000 or above $900,000 please call for quote.
Call for details!
If you know of someone who would appreciate my services, please contact me with their name and number and I will be happy to help them!
Jennifer Hernandez
Vice President/Mortgage Consultant
Patriot Bank Mortgage
Rates are up for 3 days in a row! Why? Instability in Europe, most specifically there are fears of inflation as food and energy prices are increasing. The ECB yesterday said they are not going to rise the interest rates, but the markets aren’t going for it, as inflation seems to already be on the rise. So bond markets reacted.
On our home turf, there were mixed signals today, which isn’t good market news either. Only 36,000 jobs were created in January, while 148,000 were expected. Normally that would lower rates, but with news of increased hourly wages (up .4%) and unemployment claims down, it signaled to the markets that we are slowly but surely recovering.
Don’t let your buyers and sellers be discouraged by short term spikes in rates! We are still at historically low levels of interest rates. And, we live in one of the most prosperous cities in the country.
Have a safe and warm weekend, and remember, we can still close loans in 3 weeks or less!
RATES as of February 4, 2011 (UP .25% FOR THE WEEK)
The following assumptions apply:
• 20% Down Payment (Conforming) / 25% Down Payment Jumbo (Lower down payments available – call for details)
• 1% Origination Fee
• Escrows Required (if no escrow, higher fees may apply)
• Purchase Transactions, Primary Residence (Refinances have different rates)
• 30 day closing
• Credit Score 740 +
• Debt to income ratio <=40%
• Full Documentation of Income/Assets
Conforming ($200,000* - $417,000) Jumbo ($417,001- $1,000,000*)
30 year (fixed) 5.125% APR 5.258% 30 year ( fixed ) 5.875% APR 5.997%
15 year (fixed) 4.250% APR 4.476% 15 year ( fixed ) 5.125% APR 5.326%
5/1 ARM 3.625% APR 3.535%
7/1 ARM 4.000% APR 3.751% 5/1 ARM 3.625% APR 3.520%
7/1 ARM 4.000% APR 3.737%
10/1 ARM 5.250% APR 4.552%
FHA/VA call for quote (max loan $270,000)
We do originate loans below $200,000. These amounts are chosen to show the most favorable rates.
For other product options or for loan amounts less than $200,000 or above $900,000 please call for quote.
Call for details!
If you know of someone who would appreciate my services, please contact me with their name and number and I will be happy to help them!
Jennifer Hernandez
Vice President/Mortgage Consultant
Patriot Bank Mortgage
Tuesday, February 1, 2011
The Bottom Line
Just when I was taking a breath, and thought things were maintaining some 'normalcy'.........Fannie Mae and Freddie Mac made changes as of January 10 to their risk based pricing models. What does risk based pricing mean? That for certain loan levels (based mainly on credit score and loan to value) there is a risk factor involved. Well, they just went up. ALOT. Why the change? Well, to make up for losses on the loans they made that they should not have, of course.
Here is a summary of some changes (keep in mind these 'hits' can come in the form of % to the rate, or upfront fee). These are 'examples' only.
25% is the new 20%. If you have an 800 credit score, and put 20% down. HIT. Equivalent to about .125% in rate, or $625 on a $250K loan. Investors do not consider 20% down the 'best' anymore, is my takeaway.
740 is the new 720. If you have below a 740 score, there are some significant hits to the price, depending on the down payment. For example:
20% down, score 700-719 is approximately .50% rate hit, or $2500 fee upfront
Add an 80/10 (total 90) - add another .25% in rate (that would be on top of the already increased fee for a score <720)
10% down (one 90% loan), score below 680- a 1.0% hit to the rate, or a fee of $6,875 upfront.
Should I continue? The matrix is quite extensive.
The BOTTOM LINE is that your buyers and sellers need to be sure and get preapproved BEFORE they start shopping for homes. I have seen clients with 20 years of pristine credit, and a recent collection to Time Warner of $30 they disputed for a late fee , drops the score 100 points. Really. No joke. Also, we see 'errors' all the time. On the most qualified of borrowers.
Everyone's credit is suceptible to mistakes. Everyone's. The most VALID website to pull credit for borrowers is www.myfico.com. The score given here most resembles mortgage credit scores. We have seen Equifax, Experian and Trans Union vary more than 50 points in some cases. The scores they are 'selling' is not the same as a mortgage credit score. They are selling a generic product. A money maker. Please encourage your buyers to discuss this with a mortgage professional.
As always, we are here to assist you with your clients mortgage needs! Just give anyone on my team a call (Kenny, Brianna, Nancy or myself). We are here to serve you and ensure an ontime and accurate closing. Also, did I tell you we can still close in 21 days or less on a conforming or FHA transaction?
Enjoy the weekend!
Jennifer Hernandez
RATES as of January 28, 2011 (FLAT FOR THE WEEK)
The following assumptions apply:
20% Down Payment (Conforming) / 25% Down Payment Jumbo (Lower down payments available – call for details)
1% Origination Fee
Escrows Required (if no escrow, higher fees may apply)
Purchase Transactions, Primary Residence (Refinances have different rates)
30 day closing
Credit Score 740 +
Debt to income ratio <=40%
Full Documentation of Income/Assets
Conforming ($200,000* - $417,000)
Jumbo ($417,001- $1,000,000*)
30 year (fixed) 4.875% APR 5.008%
30 year ( fixed ) 5.625% APR 5.746%
15 year (fixed) 4.250% APR 4.476%
15 year ( fixed ) 5.000% APR 5.201%
5/1 ARM 3.500% APR 3.300%
7/1 ARM 3.875% APR 3.532%
5/1 ARM 4.000% APR 3.643%
7/1 ARM 4.250% APR 3.848%
10/1 ARM 5.250% APR 4.552%
FHA/VA call for quote (max loan $270,000)
We do originate loans below $200,000. These amounts are chosen to show the most favorable rates.
For other product options or for loan amounts less than $200,000 or above $900,000 please call for quote.
Call for details!
If you know of someone who would appreciate my services, please contact me with their name and number and I will be happy to help them!
Jennifer Hernandez
Vice President/Mortgage Consultant
Patriot Bank Mortgage
Office: 713-337-8400
E-mail: jennifer@patriotbankusa.com
Blog: www.loanwithjennifer.blogspot.com
Here is a summary of some changes (keep in mind these 'hits' can come in the form of % to the rate, or upfront fee). These are 'examples' only.
25% is the new 20%. If you have an 800 credit score, and put 20% down. HIT. Equivalent to about .125% in rate, or $625 on a $250K loan. Investors do not consider 20% down the 'best' anymore, is my takeaway.
740 is the new 720. If you have below a 740 score, there are some significant hits to the price, depending on the down payment. For example:
20% down, score 700-719 is approximately .50% rate hit, or $2500 fee upfront
Add an 80/10 (total 90) - add another .25% in rate (that would be on top of the already increased fee for a score <720)
10% down (one 90% loan), score below 680- a 1.0% hit to the rate, or a fee of $6,875 upfront.
Should I continue? The matrix is quite extensive.
The BOTTOM LINE is that your buyers and sellers need to be sure and get preapproved BEFORE they start shopping for homes. I have seen clients with 20 years of pristine credit, and a recent collection to Time Warner of $30 they disputed for a late fee , drops the score 100 points. Really. No joke. Also, we see 'errors' all the time. On the most qualified of borrowers.
Everyone's credit is suceptible to mistakes. Everyone's. The most VALID website to pull credit for borrowers is www.myfico.com. The score given here most resembles mortgage credit scores. We have seen Equifax, Experian and Trans Union vary more than 50 points in some cases. The scores they are 'selling' is not the same as a mortgage credit score. They are selling a generic product. A money maker. Please encourage your buyers to discuss this with a mortgage professional.
As always, we are here to assist you with your clients mortgage needs! Just give anyone on my team a call (Kenny, Brianna, Nancy or myself). We are here to serve you and ensure an ontime and accurate closing. Also, did I tell you we can still close in 21 days or less on a conforming or FHA transaction?
Enjoy the weekend!
Jennifer Hernandez
RATES as of January 28, 2011 (FLAT FOR THE WEEK)
The following assumptions apply:
20% Down Payment (Conforming) / 25% Down Payment Jumbo (Lower down payments available – call for details)
1% Origination Fee
Escrows Required (if no escrow, higher fees may apply)
Purchase Transactions, Primary Residence (Refinances have different rates)
30 day closing
Credit Score 740 +
Debt to income ratio <=40%
Full Documentation of Income/Assets
Conforming ($200,000* - $417,000)
Jumbo ($417,001- $1,000,000*)
30 year (fixed) 4.875% APR 5.008%
30 year ( fixed ) 5.625% APR 5.746%
15 year (fixed) 4.250% APR 4.476%
15 year ( fixed ) 5.000% APR 5.201%
5/1 ARM 3.500% APR 3.300%
7/1 ARM 3.875% APR 3.532%
5/1 ARM 4.000% APR 3.643%
7/1 ARM 4.250% APR 3.848%
10/1 ARM 5.250% APR 4.552%
FHA/VA call for quote (max loan $270,000)
We do originate loans below $200,000. These amounts are chosen to show the most favorable rates.
For other product options or for loan amounts less than $200,000 or above $900,000 please call for quote.
Call for details!
If you know of someone who would appreciate my services, please contact me with their name and number and I will be happy to help them!
Jennifer Hernandez
Vice President/Mortgage Consultant
Patriot Bank Mortgage
Office: 713-337-8400
E-mail: jennifer@patriotbankusa.com
Blog: www.loanwithjennifer.blogspot.com
Subscribe to:
Posts (Atom)