UPDATE 1-US 30-yr mortgage rate drops to new record low

This is great to hear and hopefully it will drive demand. This tied to the information announced by the EPA for lead based paint at www.epaleadtraining.com should help home owners. EPALeadTraining.com has stuff about older homes built before 1978.

Low Rates are great but the HVCC has been a significant hindrance to refinancing in that applicants must pay the $450 for an appraisal to determine if they qualify from a loan amount to property value perspective. Aside from being $100 higher than it used to be the appraisal order also requires that applications be processed and submitted to underwriting before the appraisal can be ordered.
In addition, if the appraisal comes in low, an applicant might face having to pay mortgage insurance and from a credit qualifying standpoint – be further evaluated by the stricter MI underwriting guidelines. In essence even though we bailed out AIG they have minimum FICO’s about 60 points higher than Fannie or Freddie, meaning a person with a 620 FICO can only qualify for a mortgage if he has 20% equity and a debt to income ratio lower than 45%. The rates are great if they help the economy but when H.A.R.P. programs have minimum FICO’s and Servicers are not Mandated to reissue MI for refinances options are limited.
Housing has made the world go round and to think that it can not turn the wheels again is short sighted. If we are going to have the great rates lets have the ability to research property values in advance to save applicants their $450 if they do not qualify so we can reduce the bottlenecks in underwriting and processing by only proceeding with applicants that qualify.
Also lets come up with one set of guidelines for everyone all GSE’s Mortgage Banks, MI providers and Brokers. Supposedly FHA minimum FICO is 580 but no-one funds those loans most servicers require 640 FICO plus you have to get an appraisal on what is called a streamline. H.A.R.P. lets you refinance if you are upside down but your current servicer is not required to reissue your MI and lenders can impose a minimum FICO. Fannie Mae and Freddie Mac guidelines are further constricted by Mortgage insurance companies guidelines. Firms like AIG, Radian, RMIC and GE say you have to have a higher score sometimes as much as 100 points higher to qualify for MI.

All I seem to hear is that we are regulating subprime when subprime died 3 years ago. Remember the high yielding interest rates of subprime borrowers was what Wall St wanted. Subprime Mortgage was not a dirty word until the highly leveraged pump and dump energy speculating strategies of Hedge Funds and non-energy producing Banks drove energy prices to $5 a gallon gas and $3K electric bills causing the defaults in fixed income inner cities and outer-lying commuter suburbs. It was the exposing of AAA Rated SubPrime Bonds and the Credit Default Swaps that made SubPrime a dirty word.

The bad thing about HVCC is that now we can’t control the appraisers. They go around appraising houses for what they think they’re worth without regard for the loan amount or sales price. A homeowner doesn’t want to spend $450 for an appraisal only to find out that they can’t get the loan because the value is too low! Now, because of HVCC, there’s nothing we can do about it. Before HVCC the appraiser’s knew that they could lose business by appraising below sales price of below what is needed for a refinance. Nowadays they think just because they’re appraisers they know what something is worth.

The problem is in regards to refinancing. If you already have a significant loan and want to refinance your property has to appraise its’ worth – if not, you’re not getting that refinance %.

THE ONLY WAY THEY CAN FIX THE HOUSING MARKET IS TO TARE DOWN ALL THE FORECLOSURES AND TURN them TO VACANT LAND.
My loan is affordable and so are many others but the market is s-hit because of comaprisons. and the same appraisers that let greed guide their appraisals and are now affraid to accept value over the $450 thay get for free

HVCC brought on another layer of mgmt that takes 150-200 of that supposed appl fee of 450. Appr gets 200-250 and mgmt company/loan company gets 150-250 of fee.

Appraiser gets instructions to be very conservative – I am former appr that quit when HVCC was put in affect.

HVCC brought on subpar appraisers that would work for 50% of old fees and it ruined the lending environment for traditional loan officers, homeowner and professional appraisers.

It is absolutely unbelievable that in the nation where “CAN DO” is a given, people will not commit to commencing a home purchase. Let’s be honest most of us would beg, borrow or steal – figuratively speaking that is – to lock in a fixed mortgage rate such as is on offer right now.

Here is one thing that is guaranteed, unless you open your wallet and start spending or committing to a dollar spend, the economic situation will go from bad to worse, and in one year from now, you will still not have a home, and maybe no job.

What about me! Well to lock in a rate such as those on offer, I would agree to accept for the same term 2% on saving deposits, knowing that on $200k less 20% deposit my repayments will be $820 per month. I would live with my mother-in-law!! In short I would do anything to take advantage of these rates, kick start the economy and get back that feel good factor again.

What about POTUS, well maybe POTUS can come to the party and allow the Federal Reserve to act as co-depositor for 10% of the value of the home purchase, excluding jumbo mortgages. This could be done in partnership with the banks under strict guidelines ensuring funds are used only as co-deposits for home purchases.

The point, I say to anyone with $50k or more and in full employment, do not let this opportunity – $820 per month – pass you by. The banks will bend over backwards to ensure a repeat of 2007/8 and the subsequent foreclosure mess does not re-occur.

Get out there and start the ball rolling!!

1. If FMAC wants to stimulate the new housing,,rather than the refinance, market, all it need do is stop guaranteeing
the latter.
2. “U.S. 30-year mortgage rates dropped to a new record low”. Would be a real surprise if rates (a) rose to a new record low, and/or (b) dropped to an old record low.

Too many leeches and parasites still attaching themselves to the hapless buyer. Fees, fees, fees. Environmental fascism, bureaucrats, permits. With demand low, these bloodsuckers make it even less attractive to buy. We need to get back to direct buyer/seller transactions, no realtors, no fees, no red tape.

doesnt matter how low the rate is if you’re worried about losing your job and your other finances are in tatters, the last thing you’re going to do is take on several hundred K worth of additional debt

The housing and economic situation will not improve until there is a major regime change.

People wanted change, and they are getting it good and hard.

BTW – Obama was actually party to a lawsuit forcing Citibank to make increasingly precarious loans. There are all kinds of disinformation sites trying to muddy the waters on this fact, but the fact remains – Community Organizer sued a bank and forced them to make loans the bankers were loathe to make.

When politicians – or worse – naïve Community Organizers tell bankers how to run their businesses, disaster is not far behind. As a reward, Obama actually got to take over Citibank in the end.

Everything about this administration are variations on the single them entitled, “FAIL”.