By admin | March 6, 2010
1. The FHA mortgage insurance premium (MIP) will be increased from 1.75 percent to 2.25 percent April 5th 010. IMPORTANT: If you want an FHA mortgage it will be cheaper to get it now rather than in a few months.
The idea that the FHA loan program needs a higher insurance premium should surprise no one. First, the increase was proposed two years ago. Second, the FHA reserve accounts have been reduced by billions of dollars. While the FHA has substantial funds set aside for the short-term, no insurance plan can operate eternally with reserve levels falling.
2. The FHA will ask Congress for authority to raise the MIP still higher. The authority to raise insurance premiums does not mean they will be raised, rather the FHA is seeking to prepare for the future in case the 2.25 percent MIP turns out to be insufficient to cover costs.
3. The FHA will seek authority to not only raise the up-front MIP — that 2.25 percent — but also the annual MIP, now at .55 percent per year. This fee is paid as part of the basic monthly mortgage payment.
3. The FHA wants to assure that those with weak credit will pay more upfront. “New borrowers, says the FHA, “will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.” Look for this rule to go into effect this summer.
4. FHA loan guidelines will be changed to limit seller concessions. At this time owners can credit buyers with a seller contribution equal to as much as 6 percent of the sale price. Under the new rules the maximum seller contribution will fall to 3 percent. Expect this change to go into effect this summer.
4. The FHA will do more to police lenders. It will also rank lenders by performance — and will post the results online. This program will start as soon as possible, perhaps tomorrow.
5. The FHA will seek additional authority to oversee lenders.
The bottom line: Higher costs for borrowers, more security for the FHA program and fewer FHA lenders as a result of increased monitoring.
Topics: Home mortgage | No Comments »
By admin | March 5, 2010
pPosted To: a href="/mortgage_rates/blog/"MBS Commentary/a/pquot;Little Engine That Couldquot; status certainly has to go to MBS this week. Like the rest of the fixed income market, after a largely positive 2 weeks, MBS came under heavy fire today with the better than expected NFP print. When that happens, bonds of all shapes and sizes head south in a hurry, but to a much greater extent than treasuries, MBS fought back hard. What does that mean? Take a look at how MBS are definitely rallying from 1030am onward and even return to yesterday#39;s range, whereas treasuries just seem to fizzle sideways, never coming close to even the highest yields from 3/4.... As you can see, MBS appeared to almost be playing the same sort of ball they were for the past two days, but treasuries will certainly be opening their locker to find a one way ticket back to the...(a href="http://www.mortgagenewsdaily.com/mortgage_rates/blog/138772.aspx"read more/a)pdiv style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"strongForward this article via email:/strongnbsp;nbsp;a href="http://www.mortgagenewsdaily.com/channels/138772/3/forward.aspx" style="color:#3333CC;"Send a copy of this story/a to someone you know that may want to read it./div/pimg src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=138772" width="1" height="1"
Topics: Mortgage News | No Comments »
By admin | March 5, 2010
pPosted To: a href="/consumer_rates/"Mortgage Rate Watch/a/pWhen looking back on the week that was, it seems like mortgage rates went on a wild ride. Lenders repriced for the better and lenders repriced for the worse, sometimes they did both on the same day. Yet, ahead of the most influential economic report released by the government, rates managed to find their way back to where they started the week: NEAR 2010 MORTGAGE RATE LOWS. At least until 8:30am this morning. At 8:30 am eastern time, the Bureau of Labor Statistics released the monthly Employment Situation report. As stated already, this is the single most important piece of monthly economic data released to the market. Since consumer spending accounts for the vast majority of our economic growth, market participants track jobs as a way to gauge consumer demand and economic activity. If the...(a href="http://www.mortgagenewsdaily.com/consumer_rates/138619.aspx"read more/a)pdiv style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"strongForward this article via email:/strongnbsp;nbsp;a href="http://www.mortgagenewsdaily.com/channels/138619/3/forward.aspx" style="color:#3333CC;"Send a copy of this story/a to someone you know that may want to read it./div/pimg src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=138619" width="1" height="1"
Topics: Mortgage News | No Comments »
By admin | March 5, 2010
pPosted To: a href="/mortgage_rates/blog/"MBS Commentary/a/pquot;Rate sheet influentialquot; MBS prices have recovered from intraday lows, but not before several prominent lenders repriced for the worse. Since then current coupon MBS prices have bounced back to the initial post-NFP low price print. The FN 4.0 is currently -0-14 at 98-06 yielding 4.175% and the FN 4.5 is -0-08 at 101-04 yielding 4.376%. The secondary market current coupon is 4.306%. The current coupon yield is 61.7 basis points over the 10 year Treasury note yield and 57.7 bps over the 10yr swap rate. MBS yield spreads are 5 bps tighter vs. benchmarks today. In the chart above I called attention to the price levels at which most lenders published rate sheets this AM. I also pointed out where several prominent lenders repriced for the worse. Given the 6 tick turn around from 100-28...(a href="http://www.mortgagenewsdaily.com/mortgage_rates/blog/138698.aspx"read more/a)pdiv style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"strongForward this article via email:/strongnbsp;nbsp;a href="http://www.mortgagenewsdaily.com/channels/138698/3/forward.aspx" style="color:#3333CC;"Send a copy of this story/a to someone you know that may want to read it./div/pimg src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=138698" width="1" height="1"
Topics: Mortgage News | No Comments »
By admin | March 5, 2010
pPosted To: a href="/garrett_watts/"The Garrett Watts Report/a/pWe are often asked whether or not a mortgage banker should be actively managing interest rate risk via mandatory commitment loan sales. We recently provided information from a prominent hedging consultant firm regarding the pricing spread between best efforts pricing and mandatory pricing. As was noted, the wide spread between mandatory one-off#39;s and best effort pricing that was observed in early 2009 has since narrowed considerably. HERE is the data. HERE is more perspective on WHY. Many owner/operators see the large spread in commitment prices as an easy method to add 30-50 basis points in gain on sale to the bottom line. We agree, mandatory commitments offer the opportunity to increase profits and even lower rates, but we must point out the risks associated with mandatory committing...(a href="http://www.mortgagenewsdaily.com/garrett_watts/138658.aspx"read more/a)pdiv style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"strongForward this article via email:/strongnbsp;nbsp;a href="http://www.mortgagenewsdaily.com/channels/138658/3/forward.aspx" style="color:#3333CC;"Send a copy of this story/a to someone you know that may want to read it./div/pimg src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=138658" width="1" height="1"
Topics: Mortgage News | No Comments »
By admin | March 5, 2010
pPosted To: a href="/mortgage_rates/blog/"MBS Commentary/a/pThe FN 4.0 is -0-19 at 98-00 yielding 4.192% and the FN 4.5 is -0-17 at 100-28 yielding 4.405%. The secondary market current coupon is 4.33%. The current coupon yield is 63.5 basis points above the 10yr note yield and 59.4bps over the 10 yr swap. While many lenders hit rate sheet rebate by about 30bps at the open, not all desks cushioned pricing. Since the initial knee jerk reaction move lower, MBS prices have fallen further and a REPRICE FOR THE WORSE is possible. I already saw one of the GSEs reprice by another 25bps after the data was released. Looking ahead, I am hopeful the FN 4.5 will find support at the100-28 pivot (that was my pre-payrolls target). 3.68% is our next level of support in 10s....(a href="http://www.mortgagenewsdaily.com/mortgage_rates/blog/138648.aspx"read more/a)pdiv style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"strongForward this article via email:/strongnbsp;nbsp;a href="http://www.mortgagenewsdaily.com/channels/138648/3/forward.aspx" style="color:#3333CC;"Send a copy of this story/a to someone you know that may want to read it./div/pimg src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=138648" width="1" height="1"
Topics: Mortgage News | No Comments »
By admin | March 5, 2010
pPosted To: a href="/channels/pipelinepress/default.aspx"Pipeline Press/a/pA loan agent was seen leaving a title company. quot;TGIF!quot; she exclaimed. quot;Thank God it#39;s Friday?quot; quot;No, Thank God it#39;s Funding!quot; In the mid-60#39;s Woody Allen had a nightclub routine. The contraceptive pill had just come out and he said, quot;I recently had my first experience with oral contraception. I was at a party the other evening and saw this absolutely fantastic woman! I went over to her and asked if she would go to bed with me. And she said #39;No#39;quot;. Some things are simple, others not. On January 15, 2010, HUD issued a Waiver of Requirements of 24 CFR 203.37a(b)(2) revising exceptions to the FHA Flipping Rule policies . (Notice that HUD did not actually issue a Mortgagee Letter.) The FHA Flipping Rule prohibits FHA financing if the contract...(a href="http://www.mortgagenewsdaily.com/channels/pipelinepress/03052010-safe-thornburg-interest-rates.aspx"read more/a)pdiv style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"strongForward this article via email:/strongnbsp;nbsp;a href="http://www.mortgagenewsdaily.com/channels/138582/3/forward.aspx" style="color:#3333CC;"Send a copy of this story/a to someone you know that may want to read it./div/pimg src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=138582" width="1" height="1"
Topics: Mortgage News | No Comments »
By admin | March 5, 2010
pPosted To: a href="/news/"MND NewsWire/a/pVia email, I recieved the following guidance from the FHA this morning: Subject: Guidance for Currently FHA-Approved Loan Correspondents Regarding Renewal of FHA Lender Approval for 2010 As proposed in a November 30, 2009 via 74 FR 62521 , HUD is seeking to eliminate FHA approval for loan correspondents. Because this rulemaking is still in process and a final rule has not yet been issued, FHA is extending the deadline for the submission of audited financial statements for loan correspondents seeking renewal of their FHA lender approval for 2010. For loan correspondents with a fiscal year end of December 31, and that would ordinarily be required to renew their FHA approval by March 31, 2010, HUD is providing these lenders with an additional 30 days in which to submit their audited financial...(a href="http://www.mortgagenewsdaily.com/03052010_fha_approval_rule_change.asp"read more/a)pdiv style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"strongForward this article via email:/strongnbsp;nbsp;a href="http://www.mortgagenewsdaily.com/channels/138621/3/forward.aspx" style="color:#3333CC;"Send a copy of this story/a to someone you know that may want to read it./div/pimg src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=138621" width="1" height="1"
Topics: Mortgage News | No Comments »
By admin | March 5, 2010
pPosted To: a href="/mortgage_rates/blog/"MBS Commentary/a/p36,000 jobs were lost in February according to the Bureau of Labor Statistics. The unemployment rate held steady at 9.7%. The payrolls number was MUCH BETTER than expected. The unemployment rate beat forecasts by 0.1%. FEB NONFARM PAYROLLS -36,000 (CONSENSUS -50,000) VS JAN -26,000 (PREV -20,000) FEB JOBLESS RATE 9.7 PCT (CONS 9.8 PCT) VS JAN 9.7 PCT (PREV 9.7) FEB AVERAGE HOURLY EARNINGS ALL PRIVATE WORKERS +0.1 PCT (CONS +0.2) VS JAN +0.2 PCT, TO $22.46 VS JAN $22.43 FEB YEAR-ON-YEAR AVERAGE HOURLY EARNINGS ALL PRIVATE WORKERS +1.9 PCT FEB AVERAGE WORKWK ALL PRIVATE WORKERS 33.8 HRS (CONS 33.7) VS JAN 33.9, FACTORY 39.5 VS 39.9, OVERTIME 2.6 VS 2.8 FEB FACTORY JOBS +1,000 (CONS -15,000) VS JAN +20,000 (PREV +11,000) FEB GOODS-PRODUCING JOBS -60,000, CONSTRUCTION -64,000 FEB PRIVATE SERVICE...(a href="http://www.mortgagenewsdaily.com/mortgage_rates/blog/138587.aspx"read more/a)pdiv style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"strongForward this article via email:/strongnbsp;nbsp;a href="http://www.mortgagenewsdaily.com/channels/138587/3/forward.aspx" style="color:#3333CC;"Send a copy of this story/a to someone you know that may want to read it./div/pimg src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=138587" width="1" height="1"
Topics: Mortgage News | No Comments »
By admin | March 5, 2010
pPosted To: a href="/news/"MND NewsWire/a/pEquity futures are firmly higher this morning ahead of February employment numbers. Payrolls are expected to continue declining but investors are reacting positively to news that the Bank of Japan could initiate measures to protect the economy from deflation. Overseas markets have been positive across the board, including a 2.20% gain in Japan, a 1.03% gain in Hong Kong, and gains of around 1% in Europe. ldquo;The Nikkei posted its strongest week of the year as the yen weakened amid speculation that the BoJ will undertake further easing,rdquo; noted analysts from BMO. ldquo;Meantime, a successful 10-year bond sale by Greece (which raised euro;5 bln), and stronger-than-expected factory data, are giving Europe a lift, though the euro is little changed.rdquo; Two hours before the opening...(a href="http://www.mortgagenewsdaily.com/03052010_day_ahead_nonfarm_payrolls.asp"read more/a)pdiv style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"strongForward this article via email:/strongnbsp;nbsp;a href="http://www.mortgagenewsdaily.com/channels/138557/3/forward.aspx" style="color:#3333CC;"Send a copy of this story/a to someone you know that may want to read it./div/pimg src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=138557" width="1" height="1"
Topics: Mortgage News | No Comments »
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