Market Recovery Double-Edged Sword

Andy Davis

Most real estate and mortgage professionals realize that the housing recovery has been extremely good since the low in 2012.

In November the Fannie Mae Home Purchase Sentiment Index indicated that consumers aren’t as optimistic about housing prospects for the future.

Fannie Mae concludes that the decrease in the sentiment index was mainly due to two things; Expected decrease in supply and  affordability.

With current interest rates near an all-time low affordability is still high, but higher interest rates could derail consumer sentiment.

Homebuyers Unsure of How to Improve Credit

Andy Davis

A recent TransUnion survey indicated that the majority of potential homebuyers planning on purchasing a home within the next 12 to 18 months don’t know how to improve their credit.

Even more surprising was the amount that didn’t even know what a credit score was made up of and that it directly impacted their mortgage loan interest rate.

If you are interested in purchasing a property within the next year and don’t know anything about a credit score call us today for a free consultation.

Mortgage Loan Rates Set to Increase?

Bob Vaughan

Janet Yellen, the chairwoman of the Federal Reserve hinted Wednesday (Dec 2nd) that economic conditions were looking favorable for the Federal Reserve to possibly raise interest rates this month at their Open Market Committee meeting (December 15-16). “The economy has come a long way toward the (Federal Open Market Committee’s) objectives of maximum employment and price stability,” Yellen said during a speech to the Economic Club of Washington. Mortgage loan interest rates are near an all time low and the federal funds target rate has not been increased since 2006. The federal funds rate has been at .25% since the beginning of 2008 and analysts and investors are predicting a .25% – .50% increase come the December 15th meeting. If the Fed does increase the target rate come the December meeting, mortgage loan interest rates are likely to increase.

FHFA Announces 2016 Maximum Conforming Mortgage Loan Limits

Bob Vaughan

The Federal Housing Finance Agency recently announced that maximum conforming mortgage loan limits for mortgages purchased by Fannie Mae and Freddie Mac will remain unchanged in 2016, with the exception of certain designated high-cost counties which will increase. No changes to the conforming mortgage loan limits were observed in the state of Florida; the conforming mortgage loan limit in the state of Florida is $417,000, with the exception of Collier County and Monroe County which remained at $448,500 and $529,000 respectively. The conforming mortgage loan limit for Lee County is $417,000. There were 39 high-cost counties across the country which will undergo a limit increase in 2016: the majority of which were located in Tennessee and Colorado. A complete list of conforming mortgage loan limits for each county throughout the country is available on FHFA’s website: www.fhfa.gov.

Are Overlays Affecting Your Customers?

Andy Davis

Fannie Mae and Freddie Mac have their own guidelines, but sometimes investors require their lenders or brokers to go above and beyond making it difficult for qualifying customers to get a loan. Click this link to check out my video about overlays and how they may be affecting your customers.

Good News for Interest Rates

Andy Davis

The Federal Open Market Committee at the end of January calmly resisted the urge to set into play an increase in key interest rates, saying for now that holding the federal funds rate at 0-1/4 percent is “appropriate.” The FOMC statement described U.S. economic expansion since December at “a solid pace”–optimistic language not seen in previous statements. “Labor market conditions have improved further, with strong job gains and a lower unemployment rate,” the statement said. “On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish. Household spending is rising moderately; recent declines in energy prices have boosted household purchasing power. Business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has declined further below the Committee’s longer-run objective, largely reflecting declines in energy prices. Market-based measures of inflation compensation have declined substantially in recent months; survey-based measures of longer-term inflation expectations have remained stable.” But the FOMC made no move to put a rate increase in place, saying in determining how long to maintain the target range of 0-1/4 percent, it would continue to assess progress toward its objectives of maximum employment and two percent inflation. Source: MBA

HARP Refinance Mortgage

Andy Davis

harpOver the last few years many people have heard about the HARP program but detailed information on the HARP is hard to come by. The HARP program was designed for borrower’s whose loans were held by Fannie Mae (Freddie Mac also has a program with similar guidelines).

The huge benefit of HARP is that there is no appraisal required so borrower’s that have no equity or are underwater on their mortgages can still qualify.

There is no loan to value restrictions. Another benefit is that this loan can be closed very quickly.

Some important requirements for the loan are that the borrower’s must be the same as the current loan, borrower’s still must have qualifying credit, and borrower’s must show they can afford the new loan.

If you think the HARP program may be right for you please contact me today.

Monday Mortgage Recap

Andy Davis

Last week mortgage rates moved up slightly. The new chair of the Fed, Janet Yellen, had her first testimony before congress and indicated that the economy was still moving in the right direction even though economic indicators pulled back slightly. More importantly her tone led prognosticators to believe that the Fed won’t change their course any time soon so rates will stay low. Look for rates to remain fairly stagnant with slight moves each way depending on the reported data. See current information at the Wall Street Journal Market Data page.

Foreclosure and Short Sale Information

Andy Davis

The recent prolonged recession had a negative effect on the majority of Americans. Many lost their jobs and were no longer able to make mortgage payments so they either worked out a short sale with the company holding their mortgage or were forced into foreclosure. Many of these same people have been able to get back on their feet and are now interested in purchasing a home again. If you are one of those people you need to know when you will be eligible to qualify for a mortgage. The most important date to know is the date the title transferred out of your name and into someone else’s. The foreclosure proceedings could have started in 2008, but if the property wasn’t transferred until 2013 that is the time the clock starts ticking for mortgage qualification. Please feel free to contact me to help find out if you are eligible for a mortgage or when you may become eligible.