This is all well and good, and a huge relief for many.  But sometimes I have to wonder if this is just a lot of PR hoopla.  Bank of America estimates that about 45,000 customers will qualify for its plan.  So based on BofA’s past performance, maybe half will actually succeed.  Banks keep throwing out these great plans but don’t have the infrastructure in place (can I say short sales?)  to support these plans.  A client of mine has tried to get through to BofA in the past to discuss loan modification and after being on the phone for 90 minutes and transferred numerous times, were told they don’t actually qualify.  Shouldn’t it be easier than that?

So, Bank of America, if you are listening,  I hope you hold true to your plan.  You have the ability to help so many troubled borrowers, don’t let them down!

Click here to read the original article from AP: “BofA to Start Reducing Mortgage Principle.”

Interested? Call me today and I will connect you with the best rehab mortgage guru I know.

Source: Minneapolis-St. Paul Star-Tribune

Get rid of your interest-only and high interest rate loans now!  Check it out…

My husband and I are in the process of refinancing our house into a 5%, 30-year fixed loan with no upfront costs.  Killer!  We are also refinancing our rental from a 10-year interest only loan into a fixed loan as well, for very little cost.  Sweet!  

In talking with different people it seems that most of you aren’t aware of the current rates.  WELL…I feel it is my duty to bring this to your attention.  

If you purchased your primary residence or any rental income property using the once-popular 5 or 10 year interest-only loan, NOW IS THE TIME TO REFINANCE.  If the rate on your house is a fixed loan ABOVE 5.5%, NOW IS THE TIME TO REFINANCE.  If you are underwater on your home, you may even be able to refi into another loan based on your CURRENT MARKET VALUE!  S e r i o u s l y ??  Yes, underwater peeps have the option of doing a short refi which would allow you to refinance with another lender by short “selling” your home to your existing lender. 

**Disclaimer** What I really should say is “Now MAY be the time to refinance.”  Everyone has a different situation: different income, different credit score, different rate, different payment history, different house, different needs.  But until you try, you just won’t know.  Plus, rates are expected to jump by the end of the year and I don’t want you to miss the boat.  

I have some great mortgage brokers in my toolkit so if you are thinking: “Hmmmm, I hadn’t realized…” then call me today. 

“Today, February 1st, is the beginning of the new FHA Condo project guideline changes. From this point, any FHA loan for a condo will require an approval from HUD. This means that in order to do the loan, the financials from the Condo Project will need to be submitted and approved by HUD. HUD has recently said it’s taking about 8 weeks for project approvals under HRAP, but anticipates that within a couple months it may be upward of 4-6 months since there are something like 40k or more condo projects in CA alone that have yet to be submitted for approval.”

Any questions, let me know and I will put you in touch with Chet to answer your questions.

Cheers!

“Over the past year, expanded Fannie Mae and FHA guidelines have enabled many buyers in the Bay Area to enjoy the benefits of homeownership, and we rejoiced at the extension of high-balance conforming loan limits into 2010. However, it is said that much is required of those to whom much is given, and all good things come to an end. If you have prospects who are first-time buyers, self-employed or whose spouses have poor credit, it will soon become more difficult to finance their new home with an Fannie Mae or FHA loan.

On December 12, Fannie Mae will be constricting the qualifying factors of new loan submissions.

Most limiting, the permissible debt-to-income ratio of applicants will be reduced to only 45% from the 64% that can currently be accepted by underwriting. Loan options for many self-employed and first-time homebuyers will be severely impacted as a result. Two-income households where only one spouse is named on the loan application because the other has poor credit, where the household’s debts are offset with only one income, will also face great risk of being declined due to an excessive debt-to-income ratio, even if the actual household income is plenty to budget the loan.

If you are working with prospective buyers who have monthly debt beyond 45% of their income, now is the time to get them in contract and have their loan application submitted while financing is still in their favor.”

If you are currently in contract then be sure to have your mortgage broker or loan officer rush your application to underwriting before the qualifying factors for FHA and Fannie Mae loans change.  Or call me and I will refer you to someone who can.  510-612-5546.

http://www.nytimes.com/2009/11/20/business/20limits.html?_r=2&th=&adxnnl=1&emc=th&adxnnlx=1258823045-jkAzkd6FNo1zZNxkfMSHlA

Daily Value Monthly Value

6-month Treasury Security 0.16% 0.16%
1-year Treasury Security 0.32% 0.37%
3-year Treasury Security 1.36% 1.46%
5-year Treasury Security 2.28% 2.33%
10-year Treasury Security 3.45% 3.39%
12-month LIBOR 1.234% (Oct)
12-month MTA 0.544% (Oct)
11th District Cost of Funds 1.272% (Sept)
Prime Rate 3.25% (Dec)

Looking for a great mortgage broker to help decipher the weekly interest rate overview?  Email me for a list of qualified loan officers and mortgage brokers.  krista@kristashouse.com

For some reason, there isn’t much press on this and the clock is ticking.

The main reason is that the loan amount of $729,750 is set to expire at the end of December (loans submitted by December 1) and there is no reported discussion on its extension. The reality is that on November 7th, the FHFA (Government overseeing body for Fannie, Freddie and FHA), is set to release its new conforming loan limits. The press on this reports that they will be using the same formulas which were used prior to 2007 to determine the limits. (In 2007 and 2008, they kept the $417k figure to avoid a major mortgage earthquake even though the formula would have reduced it) The conforming loan limit is used in the formula for creating our High Balance (aka super conforming) loan limits for our marketplace which are set at 150% of the conforming limit. Today, in our high cost areas, we have a limit of $625,500($417k plus 150% of that amount). Please know that the loan limit we currently have at $729,750 is the product of a legislative move and was part of the Stimulus act, meaning that it will take a legislative act to extend or replace this temporary loan amount. This loan amount is a product of the formula Conforming limit plus 175%. Let me give you a couple of potential scenarios:

High Balance-
Currently-$417(conforming limit) plus 150% = $625,500

If lowered to $400k, plus 150% would be $600k

If raised to $430k, plus 150% would be $645k

As you see, unless the congress, Senate and Obama sign a bill to extend, the new loan limits won’t get you to that that $850k to $900k purchase with 20% down or the FHA purchase at $755k..This represents a good amount of our Bay Area business. Rates are one thing, the availability of loans are another.

Thanks, Chet