Updates from Fannie Mae and Freddie Mac: Changes coming to help borrower’s refinance

Yesterday, the Federal Housing Finance Agency (FHFA) announced a series of changes in an effort to attract more eligible borrowers who will benefit from refinancing their home mortgage. I wanted to make a list of some bullet points highlighting the details.

Highlights

-          Removing current 125% loan to value ceiling for fixed-rate mortgages backed by Fannie Mae or Freddie Mac. This means there is no ceiling for how underwater a borrower is on their mortgage.

-          Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie or Freddie. (This refers to title insurance.)

-          Eliminating the need for an appraisal where there is an automated valuation model (technology driven report that deciphers estimated value in seconds).

Eligibility

 

-          Existing mortgage must have been sold to Fannie Mae or Freddie Mac on or before 5/31/2009

-          Homeowner must be current on their mortgage payment with no late payments in the past 6 months and no more than 1 late payment in the past 12 months

-          You can find out if your loan is securitized by Fannie or Freddie by going to http://www.FannieMae.com/loanlookup/ or https://ww3.FreddieMac.com/corporate/

These changes go into effect on November 15th of this year. If you, or folks you know have a mortgage and they don’t have 20% equity or are even underwater and not sure they can refinance please forward this email along. Congress estimates there are about 4 million homeowners in the country who can benefit from these changes.

Thanks and have a wonderful day.

Coutesy of

Timothy P. O’Brien

Zipfel Mortgage Group| Mortgage Planner

3440 Edwards Avenue

Cincinnati, OH 45208

Fax:866-904-3470

Email: tim@zipfelmortgage.com

Website: http://www.zipfelmortgage.com/

Published in: on October 27, 2011 at 04:38  Comments (1)  
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New Appraisal Guidelines now in Effect!

New Appraisal Standards Effective September 1 for Fannie Mae and Freddie Mac

It’s finally happened: You’ve found the perfect home for your clients. Their financing is in place. But then…despite the comparables….the appraisal comes back low, threatening to ruin the whole deal.

To help make appraisals more consistent and accurate, and prevent situations like this in the future, the Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to develop the Uniform Appraisal Dataset (UAD). The UAD will (1) define what fields are required for an appraisal submission and (2) standardize both responses and definitions for certain fields.

Here are just a few of the items impacted by the new appraisal standards:

  • Days on the Market: Days on market is now defined as the total number of continuous days. If a property is taken off the market and then relisted, the appraiser will have to count all of the days it has been listed.
  • Offering Price: The original offering price and history of all price changes must be reported.
  • Property Style: Appraisers must use appropriate architectural design indicators such as “Colonial,” “Farmhouse,” etc. Descriptions such as 1 story, 2 stories, etc are no longer acceptable.
  • Condition of the Subject Property: An overall condition rating must be assigned from the predefined condition categories provided.
  • Quality of Construction: The appraiser must rate the  quality of construction of the subject property and all comps using a  list of 6 predefined quality levels.

The UAD appraisal standards are required for all appraisals conducted on or after  September 1, 2011 for conventional loans sold to Fannie Mae and Freddie Mac.

To read FAQs about the UAD appraisal standards, visit  https://www.efanniemae.com/sf/lqi/umdp/pdf/uadfaqs.pdf.      

Courtesy of

Steve Gatermann-Wells Fargo and Kris Cooper REMAX Preferred Group via Realtor/Lender Committee Cincinnati Area Board of Realtors

Published in: on September 10, 2011 at 02:59  Leave a Comment  
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Criteria for buying a home after a short sale

Below are the waiting periods for borrowers who want to buy a home after they have had a short sale. These are conventional only, not FHA.

1. The new loan will be at 80% LTV or less – Must wait 2 years from SS settlement date.

2. The new loan will be at 80.01% LTV or Higher – Must wait 5 years from SS settlement date.

If you have any questions, please contact
Chris Johnstone
Home Loans Manager, Retail Mortgage Sales
Bank of America
christopher.johnstone@bankofamerica.com
513-582-2154

Published in: on August 4, 2011 at 04:15  Leave a Comment  
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Mortgage Rates: Update

Critical Week for interest rates and we will keep you up to minute informed!

Minimum Credit score FHA 620

*4.375%

30 Year Fixed Rate

Normal Closing costs

*4.50%

30 Year Fixed Rate

$250 Closing Cost Special

*4.50%

No PMI with 15% down

30 Year Fixed Rate

Normal Closing costs

*3.0%

5 Year ARM

Normal Closing costs

*3.25%

5 Year ARM

$250 Closing Cost Special

*3.50%

15 Year Fixed Rate

Normal Closing costs

*3.75%

15 Year Fixed Rate

$350 Closing Cost Special

*4.25%

FHA/VA 30 Year Fixed

0 Points

Courtesy
TR Wise

Published in: on July 31, 2011 at 01:31  Leave a Comment  
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Daily mortgage interest rates update

Minimum Credit score FHA 620

*4.375%

30 Year Fixed Rate

Normal Closing costs

*4.625%

30 Year Fixed Rate

$250 Closing Cost Special

*4.625%

No PMI with 15% down

30 Year Fixed Rate

Normal Closing costs

*3.0%

5 Year ARM

$250 Closing Cost Special

*3.625%

15 Year Fixed Rate

Normal Closing costs

*3.875%

15 Year Fixed Rate

$250 Closing Cost Special

*4.375%

FHA/VA 30 Year Fixed

TR Wise

Sales Manager

1st National Bank

7451 Mason-Montgomery Road

Mason, Ohio 45040

Office/Cell (513) 238-0999 begin_of_the_skype_highlighting (513) 238-0999 end_of_the_skype_highlighting

Fax (513) 672-0479

Published in: on July 21, 2011 at 10:49  Leave a Comment  
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Bill Calls for Extending Loan Limits

Courtesy of Realtor Magazine

Bill Calls for Extending Loan Limits

Daily Real Estate News | Monday, July 18, 2011

A bill introduced late last week calls for extending the current conforming loan limits on government-backed mortgages at Fannie Mae and Freddie Mac for another two years.

The bill, introduced by Rep. John Campbell, R-Calif., and Rep. Gary Ackerman, D-N.Y., would allow the government-sponsored enterprises and the Federal Housing Administration to guarantee or buy mortgages worth up to $729,750 in many neighborhoods.

The current loan limits are set to expire Oct. 1. If an extension isn’t granted, the maximum mortgage amount in high-cost areas will drop from $729,750 to $625,500 (however, that limit will vary throughout the country).

“With the economy remaining fragile and the housing sector still struggling to recover, now is not the time to make the cost of mortgages more expensive,” Ackerman said.

The National Association of Home Builders has said it fears more than 17 million homes nationwide will become ineligible for more affordable federal funding if the loan limit expires. However, last week, Federal Reserve Chairman Ben Bernanke saidhe was confident that the private market, including investors and insurers, would fill the void if the conforming loan limits expired — although likely at a higher cost to borrowers.

Source:“Lawmakers Introduce Bipartisan Bill to Extend Conforming Loan Limits,” HousingWire (July 15, 2011)

Read more:

Mortgage Caps Are Just Part of the Problem

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Published in: on July 20, 2011 at 03:57  Leave a Comment  
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Breaking News- Financial Markets

Financial Market Update

Breaking News! The Treasury Department just announced they will begin selling some of their massive holdings of Mortgage Backed Securities to the tune of $10 Billion per month depending on market conditions. They say this is due to the stabilizing economy and market conditions that are ripe for selling. The Treasury acquired $142 Billion in debt during the financial crisis. News of this unloading process has immediately pushed Bond prices significantly lower as Traders try to get their own positions sold. It’s like musical chairs…no one wants to be the last one standing with a mitt full of Mortgage Backed Securities.

Published in: on March 22, 2011 at 06:53  Leave a Comment  
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Mortgage Update: FHA Annual Mortgage Insurance Premium increasing .25%

Info courtesy of Steve Gatermann

With Mortgagee Letter 11-10, FHA announces an increase to the Annual Mortgage Insurance Premium on standard FHA loan programs and a change that affects case numbers.

Here are the 7 things you need to know about these changes:

1. These changes are effective April 18th, 2011.

2. The Annual Insurance Premium will increase .25% for standard forward mortgages. The Upfront Mortgage Insurance remains at 1.00%.

3. The Annual Premium was .90% is now 1.15% for LTVs GREATER than 95% on 30 year loans

4. The Annual Premium was .85% is now 1.10% for LTVs EQUAL to or LESS than 95% on 30 year loans

5. The Annual Premium  was.25% is now .50% for LTVs GREATER than 90% on 15 year loans

6. The Annual Premium was 0% is now .25% for LTVs EQUAL to or LESS than 90% on 15 year loans

To illustrate,  a home priced at $163,000 with 3.5% down the monthly payment was $118 per month and is now $151 per month– a $33 per month increase.

___________________________________________________

The following is an explanation from David H. Stevens, the Assistant Secretary of Housing & Housing Commissioner:

This week, February 14, I announced an increase in the Mortgage Insurance premium at FHA in the amount of .25% per year. It is important for all to at least understand the reason. I know there may be many responses to this, and I will be unable to respond, but I do think it important for all to understand the obligation. 

FHA has suffered greatly from originated loans in years 2006-2008 and fortunately due to the changes we have implemented in the past two years since I was sworn in, we have managed to avoid external intervention into the program that could have forced even more conservative policies to impact your business.

I testify today, Feb 16, to the House Financial Services committee. Some will want, and do want, to eliminate all guarantees from FHA. It is through responsible management that I will argue against the need to intervene.

As I am sure you are aware, FHA has a statutory obligation to maintain a 2% capital reserve. We have been below that now for two annual actuarial reports to congress and this year it actually dropped further than the previous year. While there are reasons for this, like select mortgage Programs that really hurt the fund, it won’t matter much to legislators as their primary concern is that we become compliant with the law and get the reserves back up.

In the last year actuarial, submitted in October, it said that in the base case we would not get above 2% until 2015 and, additionally, there was a 40% risk that we could actually go negative. Going negative would require a direct subsidy from the treasury…….a bailout.

I recommended this increase. I recommended the increase based on my obligation to get the reserves back up.  I do understand the concerns of those in the industry. Unfortunately, if we do not get the reserves back up it would be likely that congress would take their own actions which could make the outcome even worse.

While I do not expect all to agree, I have made these moves to actually protect the program so that it could continue.

Thanks

David H Stevens

Assistant Secretary of Housing &

Federal Housing Commissioner

US Department of Housing and Urban Development

417 7th Street, SW

Washington , DC

_________________________________________________________________________________________________________________________________

 

Steven Gatermann
Branch Manager
Wells Fargo Home Mortgage
MAC m6919-011
161 Northland Blvd. Suite D
Cincinnati, OH 45246
513.326.0212 begin_of_the_skype_highlighting   513.326.0212 end_of_the_skype_highlighting Tel
800.846.2240 begin_of_the_skype_highlighting   800.846.2240 end_of_the_skype_highlighting x 12 Toll Free
513.618.9488 Fax
steven.gatermann@wellsfargo.com
http://www.stevegatermann.com

Published in: on February 23, 2011 at 08:50  Leave a Comment  
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What is happening to the Mortgage Rates? (Feb 2010)

Many purchasers have been sitting on the sidelines waiting for home prices to hit bottom. They want to guarantee that they are purchasing at the best possible price. Like them, we also believe that prices still have some room to fall in most markets. However, we disagree that waiting is a good financial decision. The buyer should not be concerned about housing prices. They should be concerned about cost.

The cost of a house is made up of the price AND THE INTEREST RATE they will be paying. Two different pieces of news released yesterday highlight this point.

PRICES

The National Association of Realtors (NAR) released their 4th quarter housing research report [4]. In the release, they reported that home sales rose 15.4% in the 4th quarter over the 3rd quarter. They also showed that prices remained stable during the year:

The national median existing single-family price was $170,600 in the fourth quarter, up 0.2 percent from $170,300 in the fourth quarter of 2009.

A buyer who delayed a purchase might find solace in the fact that prices have not increased. However, the other news released yesterday paints a different picture.

INTEREST RATES

The Primary Mortgage Market Survey [5] was released by Freddie Mac which showed that the 30 year fixed rate mortgage was at 5.05%. Frank Nothaft, vice president and chief economist of Freddie Mac said:

“Long-term bond yields jumped on positive economic data reports, which placed upward pressure on mortgage rates this week…As a result, interest rates on a 30-year fixed-rate mortgage rose to the highest level since the last week in April 2010.”

So prices have remained stable but interest rates have risen dramatically in the last 90 days. What does that mean to a buyer looking to purchase a home this year?

The price is the same. It just costs more.

Let’s show you what the news means:

By sitting on the sidelines for the last 90 days a purchaser lost:

  • $89.44 a month
  • $1,073.28 a year
  • $32,198.40 over the thirty year life of the mortgage

If you buy a $340,000 home, double all these numbers.

Bottom Line

Even if prices fall another 10% this year, the cost of a home will increase if interest rates go up more than 1%. Buyers should not worry where prices are going. They should be concerned where costs will be later in the year.

Courtesy of Steve Gatermann and Wells Fargo

Steven Gatermann
Branch Manager
Wells Fargo Home Mortgage
MAC m6919-011
161 Northland Blvd. Suite D
Cincinnati, OH 45246
513.326.0212 Tel
800.846.2240 x 12 Toll Free
513.618.9488 Fax
steven.gatermann@wellsfargo.com
http://www.stevegatermann.com

Published in: on February 15, 2011 at 15:41  Leave a Comment  
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FED release updated Appraisal Guidelines

 

Fed releases updated appraisal guidelines

The Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration jointly last week released the latest and what is expected to be final version of property appraisal guidelines.

The new guidelines set a standard for appraisal independence. Lenders can exchange information with appraisers, but they cannot “directly or indirectly coerce, influence, or otherwise encourage an appraiser or a person who performs an evaluation to misstate or misrepresent the value of the property.”

Among other rules:

  • Banks cannot tell the appraiser of any expected or qualifying estimate of value.
  • Banks cannot specify a minimum value requirement for the property that is needed to approve the loan or as a condition of ordering the valuation.
  • Banks cannot tie an appraiser’s compensation to loan approval.
  • Banks can’t blacklist an appraiser if his valuations fail to meet expected thresholds.

The agencies also clarified that broker price opinions (BPOs) don’t comply with the minimum appraisal standards.

Source: NAR

OAR eWeekly News Summary for Week of Dec. 6

Published in: on December 7, 2010 at 17:52  Leave a Comment  
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