Why ask so much to get a mortgage?

It’s true, we do ask for a lot, but that is QUICKLY changing. We have multiple lenders that do auto verification of income, and assets. Also, one lender is rolling out the ability to E-sign your closing docs. It’s the closing of the future, and I am so excited to be part of it!Why so much paperwork!

Lower FHA costs, TODAY

Good morning everyone!

Today is the day that FHA premiums are being lowered. They are going from 1.30%/1.35% to .80%/.85%. I have been doing a ton of estimates recently for those with FHA loans looking to reduce their mortgage insurance, and the savings is incredible; at least $150/month for each scenario.

Please pass this great article on the 4 things we can expect to see now that the premiums are lower.

​PS- Mortgage rates are slightly worse this morning.
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Rates getting better

Although not always the case, this is a good representation about what happens to rates when there is volatility in the stock market. The DOW is down 300 points, and mortgage bond pricing is going strong (big green candle in the second picture). Rates are only getting better…


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Rates getting better

Good morning all,

December retails sales were down .9%, compared to the estimate of .1% that analysts had predicted. This is causing the stock market to be down about 200 points so far.

This is helping mortgage rates quite a bit. Here is the morning chart:

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How low can they go…? That is the question.


Many of you know that the FHA monthly mortgage insurance will be decreasing starting January 26th. Here are some more details on it:

Reduction of annual MIP Rates
In an effort to make homeownership more accessible and sustainable for credit-worthy families, FHA has published Mortgagee Letter 2015-01 implementing reduced annual MIP rates for FHA Title II forward mortgages effective for case numbers assigned on or after January 26, 2015.

The new annual premiums will be as follows:


– Annual premium is reduced 50 basis points on both purchase
and refinance transactions
– Applies to all FHA loans with terms greater than 15 years
– There is no change in premium on 15 year or shorter terms
– All loan types are affected except streamline refinances that
are refinancing existing FHA loans endorsed before
May 31, 2009
– Hawaiian homelands (Section 247) are excluded
– There is no change to the upfront premium (1.75%) or the
life of loan requirement

Rates- 1/13/2015

Good morning all!

Mortgage rates have had a great run since the beginning of December. Here is how the chart has looked.

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I have been in contact with some of my past clients to see if a refinance would make sense for them. Please let me know if I can help you with anything.

3% Down Payment, here!

Good morning all!

I am sure you have seen the headlines for the 3% down payment option for Fannie Mae and Freddie Mac loans. With the backing of these two huge lenders, our lenders are starting to come out with guidelines and requirements. We have our first lender that has come out and said they will do this loan. The main guidelines are below, and it may seem like gibberish.

Just let me know if you have any questions on it, and please forward this to anyone looking to take advantage of this. This will allow people to avoid the very expensive FHA mortgage insurance that lasts for the life of the loan. This loan still requires mortgage insurance, but it will be much easier on the pocket book.

Summary: Fannie Mae is expanding LTV/CLTV, and HCLTV Ratios. Effective with locks on or after December 17th, we will accept standard purchase and limited cash out refinance transactions at the higher LTV Options recently released by Fannie Mae subject to the below requirements. Note: The MyCommunityMortgage® (MCM®®) enhancements are under review and not available at this time.
For standard purchase transactions (non-MCM) transactions with LTV/CLTV/HCLTV from 95.01 to 97%:
Standard contribution requirements apply. Gifts are allowed for down payment; however, gifts are not allowed for reserves regardless of Fannie Mae/DU acceptance.
640 minimum credit score required.
Maximum CLTV is 105% if the subordinate lien is an eligible Community Seconds loan.
At least 1 borrower must be a first-time homebuyer (must not have owned any residential property in the past three years)
Pricing adjustments may apply.
Fixed Rate loans only. Adjustable-rate loans are not permitted.
Standard loan amounts only. High-balance loans are not permitted.
One unit principal residence only. Condos and PUDs allowed. Manufactured homes not eligible.
AUS approval required.
Mortgage Insurance: 35% (Reduced MI not permitted). All MI Company requirements must be met.
Note: LPMI not available at this time. LPMI enhancements are under review and are expected to be released at a later date.
Homebuyer Education and Counseling is not required for non-MCM loans.
Reserves requirements will be determined by DU; however, reserves may NOT come from gifts.
All other Guideline and Fannie Mae requirements for purchase transactions apply.


It is about to get slightly easier for lenders to lend to people. It appears that the federal agencies that back the mortgage market in the US, Fannie Mae and Freddie Mac, are about to change the rules on ‘mortgage buy backs.’ When these agencies agree to do a loan, they put themselves on the line by trusting that the lender doing the actual loan has done their due diligence in underwriting. If they feel that the lender has not done their due diligence, and the loan goes into default, they have made that lender buy the loan back. That can be devastating to some lenders, especially the smaller, local lenders. It is common in the industry to say that a buyback is death for some of these lenders.

They are changing things now. The new rules say that if the borrower has made 36 monthly payments, and then goes into default, they will not go after the originating lender. That is good, because it will encourage lenders to lend more. They won’t have the fear of the buy back.

They will continue to underwrite aggressively, but if it does go bad, they won’t be on the hook after that 36 month period. That is a good thing.

There is more here:

3% Down Payment coming soon

Some of you will probably see this headline soon. Keep in mind that although the big guys will do it, it doesn’t mean that it is available yet. Watch this space for when our 20+ lenders will do it.

Rate Outlook

Here is what this week has in store for us:


Consumer Confidence: This is our first important data point of the week. The market is expecting a reading of 80.3. Historically, this is a pretty high reading but last time out it hit 80.7. A reading above 80.5 will pressure bonds. The market will discount a weaker reading due to the weather but a reading below 72.0 will certainly help MBS pricing.
Durable Goods: This is a very important reading. Last time out this was a huge disappointment with a reading of -4.3%. Which was followed by a big-time miss with Non-Farm Payroll. The market is expecting just a small pull back of -0.5%. If we get a reading above +1.0% then MBS will get hammered.
Janet Yellen: She will finally have her second big testimony in D.C. This time it is with the Senate Banking committee which had to be rescheduled due to the weather. MBS sold off in direct reaction to her prepared statements and testimony in front of the House. There is no reason to think that she will change her testimony or her message. And that is likely to remind the markets that the Fed will be tapering further and this will once again provide pressure on MBS.
GDP: We get the second release of the 4th QTR GDP and the market is expecting it to be revised downward from 3.2 to 2.7. If it stays above 3.0% this will provide pressure on your pricing. If it drops below 2.5%, then MBS will rally.
Chicago PMI: Both the Empire and Philly manufacturing readings have been very weak. The Chicago PMI report will give us a better understanding if those are isolated areas or if it is more of a nationwide slowdown. A reading below 55 is needed for you to see an improvement in pricing.
Consumer Sentiment Index: This is expected to be in the 81.5 range. A reading above 82 will pressure pricing and a reading of 80 or below will help pricing.
Treasury Auctions This Week:
02/25 2 Year Note
02/26 5 Year Note
02/27 7 Year Note