April 1, 2011 Do you know what QRM means?

Do you know what QRM means? Being in real estate, we all should. It’s a topic that has been blown over and swept under the carpet of late by legislators, kind of like the tax to a property seller that was whirled up in the Medicare bill last year (Medicare = residential home sales?) I just don't get that logic. That's why I will never be President of the United States, among other reasons. The Frank Dodd bill that has gotten so much attention has a provision that must be passed by SIX (6) different agencies of the federal government. It says that if a lender/bank (or whomever) makes a mortgage loan that is NOT a Qualified Residential Mortgage (QRM) they have to have 5% of the loan amount in reserves for possible default of that loan. So what is a QRM? That is the big question. Rumors have flown around that all jumbos will not meet the criteria. So 5% of those loans will have to be in reserve. That would greatly affect a market that is making a comeback. FHA loans do not count. So they are safe. What we need to be concerned about is that it has been proposed (this week) that a QRM be the following: 20% down (purchase), or 25% equity (refinance). Housing ratio does not exceed 28% (currently we are seeing as high as 42%), and that there are NO 60 day lates on any credit at all in the last 2 years. So this means, that if you are purchasing above the FHA loan limit of $271,000- then you have to put 20% down. That is what it means, plain and simple. Once defined over the next weeks, there will be a comment period until June. Be sure to visit your HAR /TAR /NAR website and comment on how this will affect an already hurt industry. We have already gotten conservative, is this really needed? I could go on for hours. But get involved. Google QRM and read up, and make sure you let your voice be heard in the comment period. We have to fight guys. No one listens to mortgage lenders anymore, so it may be up to the realtors. Have a great weekend, and go sell some houses- we can do 5% down as of right this minute on all conforming loan amounts. We can even do 10% down to $650,000 and 15% down to $850,000. And I even have 25% down to 4 million. That’s' right, it’s not a typo. If you have a super jumbo client right now, he can keep his money working in the market, and get 25% down for a 5/5 ARM rate with a 3 in it! Call me for details. RATES as of April 1, 2011 (UNCHANGED 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*) 10 year (fixed) 3.625% APR 3.939% 15 year ( fixed ) 4.750% APR 4.952% 15 year (fixed) 4.250% APR 4.472% 30 year ( fixed ) 5.50% APR 5.622% 30 year (fixed) 4.875% APR 5.005% 7/1 ARM 3.875% APR 3.548% 5/1 ARM 3.750% APR 3.392% 7/1 ARM 4.000% APR 3.596% 10/1 ARM 4.750% APR 4.225% 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 To opt out hit Reply and put Unsubscribe in the subject. Information provided in this e-mail is intended as a tool for Real Estate Agents to be informed of the approximate rates available for home mortgages. It is intended for their sole use and purpose only and is not for distribution to the general public. Depending on the borrower's actual circumstances, such as credit, debt ratios, etc., rates may vary. Special niche products may also be available.