Are You Kidding Me??

WOW! Get ready for this one...effective June 1st, Fannie Mae will now require that a second credit report be pulled prior to closing on all home transactions (refinances and purchases).

I understand that Fannie Mae had a lot, and I mean a lot, of losses over the past couple of years. However, the ramifications of this are going to send shock waves through the industry for several reasons:

1. Credit is always a moving target. You can have zero transactions on credit in a 30 day period and pull different scores. Loans must be underwritten off of exact credit scores. This means that if you started your loan with a 740 and end up with a 739 (yes one point), your loan has to go back to underwriting and closing will be delayed.

2. Borderline Deals: If you have a 680 credit score, which is the lowest you can have to obtain PMI, and at the end of the transaction you are a 679 you can say good bye to your loan, your earnest money, and the house.

It remains to be seen exactly how this will be handled in underwriting, but for now, DO NOT have any activity on ANY lines of credit once you apply for a loan application. More information to follow...

Legislative Alert!

So those of you that have read this blog are aware of the trials and tribulations that have occured since the onset of the Home Valuation Code of Conduct (HVCC). Some of the Realtors that I work with read this blog and know first hand some of the issues that we have had to deal with, and the work it takes to overcome these issues. Well...good news may be on the horizon! The National Association of Mortgage Brokers has successfully lobbied congress to get an amendment offerred to immediately "sunset" the HVCC. This means that lenders would again be able to order appraisals from their trusted associates, appraisers would get paid their fair wages, and the overall quality of work on appraisals would increase. This is potentially great news for Buyers, sellers, loan officers, Realtors, title companies, appraisers...basically everyone connected to a home transaction. I will continue to keep you updated. here is some of the info: (by the way...rates are still unbelievable!!!)

After months of hard work and meetings with Congress, NAMB is pleased to announce it was successful in working with Congress to have an amendment offered to S. 3217, the "Restoring American Financial Stability Act of 2010," that would create new appraisal independence standards and SUNSET the HVCC. Senate Amendment 4015, introduced by Senator Casey (D-PA), would, upon enactment of S. 3217, immediately sunset the highly controversial Home Valuation Code of Conduct (HVCC). The amendment would also bring greater appraisal quality and accountability to the housing market by requiring licensing standards for appraisers pursuant to the SAFE Act, and require minimum standards for AMC's, among other provisions.

NAMB applauds Senator Casey and staff for their hard work on this amendment. The amendment will be officially public tomorrow, continue to monitor your email and NAMB's website (www.namb.org) for updates on this amendment's progress.

For a copy of the amendment, go to this link: https://www.namb.org/images/namb/GovernmentAffairs/casey%20amdt%204007.pdf

Thanks for stopping by! Call me or our great team with any questions!

Wow! Did you see the DOW yesterday...What it means for Rates

Absolute chaos and pure panic on Wall Street yesterday as the DOW suffered it's largest single day fall in History, almost 1000 points. Stocks ended up down about 360 for the day, gains coming as word spread that most of those mass sell offs were triggered by computer programs, and someone had fat fingered their keyboard selling billions of stock instead of millions.

However, not all of the anxiety was due to an error. The issues with Greece are becoming more paramount by the day. The concern is that other countries, who are heavily invested in Greek debt, such as France and Germany will follow them into a financial black hole should the Greeks default on their promissory notes. France and Germany are widely considered to be the healthiest of the European Union (at least financially!). If Greece were to default on the loans France and Germany made, it would hurt their economies tremendously. Spain, Italy, Portugal, and Great Britain are widely invested in Greece as well, and are already paying the price. The Portuguese government is issuing 10 year bonds paying 11.5%!!!! That means they pay twice as much to borrow money as France does. Holy Cow!!

What does this mean for mortgages, i.e. why am i talking about it?? It is the flight to quality that results when stocks are in a wide sell off. Investors pull out of the stock market and invest in government debt (treasuries). The prices of the bonds go up, which causes the yield to fall. Mortgage backed security bonds are closely tied to these types of securities. That means...RATES FELL YESTERDAY! Bad economic news for most people is good news for those buying and refinancing. Rates are now at the lowest levels of 2010. Not quite as low as the tail end of 2009, but close. If you were sitting on the fence, you better jump off ASAP as rates move up much faster than they move down.

Call me with any questions. 936-447-LOAN!