The death of the mortgage banker and broker, or is it??

Guest Writer for e-PropertyLinks Blog, Rob Chrisman

For archived commentaries, check http://www.robchrisman.

How much money are mortgage bankers, including management, making? According to the MBAA, average profit per loan is up nicely versus the first quarter moving to over $1,300 on each loan originated in the second quarter. In addition, production volumes were up and average pull through went from 67% up to 73%! Check out: http://www.mortgagebankers.org/NewsandMedia/PressCenter/70813.htm

Although the death of the mortgage banker and broker is greatly exaggerated, a good share of their business has gone elsewhere. Community banks have seen their relative volumes increase, and some believe that they are well qualified to fill the void left by mortgage brokers. These banks are chartered to serve their local markets; their boards are typically influential in the market place, most have adequate capital and can fund their own loans, they have access to seasoned talent pool, inexpensive technology and are not over burdened by regulatory pressure. And many are entering the warehouse business. And what happens to the bulk of their production? They sell many loans to the usual suspects: Wells, BofA, Citi, Chase, etc.

Industry-wide, doesn’t everyone agree that it is a good time to be originating loans? The quality of loans being originated is higher than ever due to market driven property values, and conservative underwriting on simple loan products, with down payments. Not to mention that the lack of competition, historically low interest rates and the yield curve translate to high margins and profitable mortgage businesses.

As we thought, mortgage applications last week rose 8.2% after three straight weeks of dropping. Refinancing applications increased 14.5% for the week before Halloween, although purchase applications fell a seasonally adjusted 1.8%, the MBAA reported.

Remember the name “GMAC”? It is slowly going away. They told clients that “effective immediately, all note endorsements should be made to Ally Bank instead of GMAC Bank.”

Pulte Homes, now the largest home builder in the US, “only” lost $361 million in the latest quarter, compared to a loss of $280 million a year earlier. On the good side, orders were up 35%. According to the press release, half of the latest quarter’s results included the acquisition of Centex: $164 million in impairment and land-related charges and $87 million in Centex-related charges.

We have about a month and a week until Fannie releases Desktop Underwriter 8.0. One can taste the excitement in the air. Scheduled for the 12^th, this release will include changes to the DU credit risk assessment and a number of eligibility guidelines.  The maximum allowable total expense ratio in DU will be revised to 45%, with flexibilities offered up to 50 percent for certain loan case files with strong compensating factors.  If current debts exceed the maximum allowable total expense ratio, the loan casefile will receive an “Ineligible” recommendation. The minimum credit score for Fannie will be 620, with some complicating factors for DU Refi Plus loans. And Fannie clients are aware that DU Version 8.0 will no longer issue EA-II and EA-III recommendations, except on those loan case files that were underwritten as DU Refi Plus.  EA-I recommendations will continue to be available through DU Version 8.0, and reduced MI will no longer be offered with DU Version 8.0.

The markets saw some volatility yesterday, with the stock market coming off its lows. Nonetheless, both the DOW and the bond market finished the day down. Factory Orders were up .9% in September, the fifth increase in a row. Rates were higher all day, and gold and oil prices increased. Something has to give: it is highly unusual to have commodity prices going up, leading to inflation, while rates stay low.

One area of concern is obviously the Fed’s continued purchase of mortgage securities, thus keeping prices high, rates low. The government is slated to end its purchases of mortgage securities in the first quarter of 2010 and some analysts are predicting that this will add as much as a full percentage point to mortgage rates. Are you ready for that in your forecasts? Indirectly this, and other government actions, has led to a slow down of foreclosures, but going forward this will depend more on employment and income as it traditionally has. Employment not improving and even worsening, will only add to foreclosures. We will have some help with the first-time home buyer tax credit extension.

Today could be interesting. Not only will the Treasury announce how much it plans to raise in note and bond sales next week, but we hear the results of the FOMC meeting. Overnight rates are expected to stay the same, but watch the language for the Fed’s future plans. The May 2010 fed-funds futures contract is pricing in about a 50-50 chance of the FOMC to raise the funds rate to 0.5% at its late April meeting. Friday’s employment data is still where most of the focus is. Expectations for Friday’s employment report include a rise in the unemployment rate to 9.9%, flat to slightly better hourly earnings, non farm payrolls to shrink by about 175K and the average workweek to rise slightly. With all this in mind, the yield on the 10-yr Treasury is back up to 3.50%, and mortgage prices are worse by between .125 and .250.

Rob Chrisman   For archived commentaries, check http://www.robchrisman.com/, or write to rchrisman@robchrisman.com. The commentary is produced every business day.

To have your neweletter featured on the front page of e-PropertyLinks, please send your articles, contact information and picture to Robin Weirich at Robin@e-PropertyLinks.com

Robin Weirich CBW

 

Interesting Market Tid Bits From Rob Chrisman

 

Guest Writer for e-PropertyLinks Blog, Rob Chrisman

For archived commentaries, check http://www.robchrisman.

Sorry the commentary is a little late today. I was trying to track my Chia Pet order. Who could resist? www.chiaobama.com Don’t be the last one on your block to own one! (These may have contributed to the strong Retail Sales number this morning.)

In my spare time I write an advice column. The other day I received a letter. “Dear Robbie (“Dear Abby” was taken) – I am a broker who specialized in the jumbo market. It is the only thing I know – I can’t do anything else. My question is will jumbo origination come back before Thanksgiving or after Thanksgiving?” I wrote back, “Dear Future Bank Employee – Thanksgiving of what year? The “private label” residential mortgage-backed securities market remains dormant, and some estimates peg it at less than 20% of 3 years ago. Only about 6% of loans (volume-wise) being originated are “jumbo”. And of that, 3% are from $417k up to $729k, and 3% are $729k and higher. At this point, the vast majority of jumbos are being put into banks’ portfolios, are being originated through bank retail channels, and there is little to suggest that anyone is going to ramp up jumbo production through wholesale or correspondent channels.”

I am often asked about mortgage security prices. MBS prices are generally seen on sites that charge a subscription, although some folks, as a proxy, use the yield on the 10-yr Treasury. One site that is worth checking out is http://www.mortgagenewsdaily.com/

JPMorgan Chase, who has been known to originate a loan or two and is the second largest bank in the US by assets, had 3^rd quarter earnings of almost $3.6 billion. Stockholders should be pleased, since Chase has already paid back their TARP funds to the government and it appears that Chase’s investment in WaMu and Bear Stearns is paying off. Chase added $2 billion to its consumer credit reserves, bringing the companywide total to $31.5 billion, or 5.3 percent of total loans. “Credit costs remain high and are expected to stay elevated for the foreseeable future,” Dimon said in the statement. “While we are seeing some initial signs of consumer credit stability, we are not yet certain that this trend will continue.”

Interestingly, the latest H.8 report showed that large domestic banks were net sellers of $33 billion MBS over the last week in September, which amounts to about 5% of their total MBS holdings. Are they reducing the size of the balance sheet or realizing quarter-end earnings, with the help of the Fed buying them? Well, if one looks at the market, it is estimated that these loans have at least 4 points of profit in them, amounting to $1.2 billion in profit. And they shouldn’t have any problem replacing them with new production, right? But while we’re talking about banks making or losing money, the unrealized losses on the books of domestic banks also declined dramatically in recent quarters, which could have a meaningful impact on tangible common equity ratios of some banks. This may account for some of the nice rally that we’ve recently seen in bank stocks.

Lock desks slowed a little last week, at least according to the MBAA. Applications for the week ending 10/9 fell about 2% – not a shock given that they hit a record the week before.

It is another small step in the right direction that GMAC Bank’s Correspondent Funding group removed the funding cap price of 103.5 for all conforming loans locked after yesterday. However, and this must sting for wholesalers, “Any loans originated through a third party Broker, including table-funded loans, will continue to be subject to a yield spread premium of 3% of the loan amount as stated in the Correspondent Client Guide.”

Not content with the current form, Wells Fargo’s correspondent group updated their Verbal Verification of Employment form. “To align with agency guidelines regarding data elements that are required on the Verbal Verification of Employment (VVOE) form, Wells Fargo Funding is updating our VVOE form” after November 1. So after that date, loans submitted for prior approval underwriting will be conditioned accordingly. “Sellers submitting Delegated loans are reminded to comply with Agency requirements regarding VVOE policy and also have the option to use Wells Fargo’s form”.

U.S. Bank Home Mortgage Wholesale Division (USBHM) previously outlined their requirements to insure compliance with the changes to Reg. Z. They previously stated that a corrective TIL disclosure would be required when the APR on a subsequent TIL increased by more than 0.125% when compared to the early TIL.  Effective Friday USBHM will require a corrective TIL disclosure when the APR on the corrective TIL has increased or decreased by more than 0.125% when compared to the APR on the most recently disclosed TIL. The 3 day period stands.

Hope springs eternal. Jeff Walton, who ran residential mortgages for Bear Stearns, is forming National Residential Mortgage. The company will make home loans on behalf of First Arizona Savings. But don’t look for anything too exciting: nothing is planned to be held in portfolio, and the loans will be conventional mortgages that meet FHA guidelines. Since First Arizona is a federally chartered thrift, National Residential Mortgage will be eligible to issue mortgages in all 50 states and have access to funding from deposits.

So how have securities backed by mortgages been doing relative to Treasury securities? Recently the “spread”, or the difference in yield between the two, has been very narrow (“tight”). Some analysts feel that it will continue to improve if mortgage production declines, and the Fed continues to buy mortgage securities, or if the Treasury continues to auction off monumental amounts of fixed-income securities. The ownership structure of the MBS market has changed, with the Fed being the predominant buyer. So until private investors come back into the market, analysts feel that there is very limited upside to owning agency MBS over Treasuries at current spread levels. And tight spreads are good for mortgage prices, in general.

Something has to give, though, right? Gold, stock, and bond prices all can’t keep going up forever, right? Well, with some profit news from Intel, overseas equity markets rallying, and the news this morning from Chase, bonds could come out on the short end. Treasury prices are lower, rates higher (the 10-yr is at 3.42%), and mortgages are, prior to the Retail Sales numbers, down (worse) almost .5. And I don’t think that the release of the FOMC minutes in several hours will help us. Retail Sales were down 1.5%, but this was better than expected. In fact, if one factors out autos from the number, Sales were up – so has consumer spending recovered?

Roz and Gloria were doing some carpenter work on a Habitat for Humanity House.  Roz was nailing down house siding, would reach into her nail pouch, pull out a nail and either toss it over her shoulder or nail it in.
Gloria, figuring this was worth looking into, asked, ‘Why are you throwing those nails away?’ Roz explained, ‘When I pull a nail out of my pouch, about half of them have the head on the wrong end and I throw them away.”
Gloria got completely upset and yelled, “You moron! Those nails aren’t defective! They’re for the other side of the house!”

Rob Chrisman   For archived commentaries, check http://www.robchrisman.com/, or write to rchrisman@robchrisman.com. The commentary is produced every business day.

To have your neweletter featured on the front page of e-PropertyLinks, please send your articles, contact information and picture to Robin Weirich at Robin@e-PropertyLinks.com

Robin Weirich CBW

Caution Drama Queen Just Ahead

This is a re-Post of a past Blog.  I am reposting it due to the fact.. that not much has changed on a positive side of lending since this was written a year ago.  In fact… with the new appraisal changes and the daily underlying investor changes, short sales and distressed properties and property owners,  things seem a bit more bleak.  Hopefully we are starting to see some light at the very end of the tunnel.  Though it may just be a reflection off a dime, I see laying on the ground.  Though this particular Blog was written with a humorous note; it does show a true reflection of what we have been through this past 18 months and what may still lie ahead in the finance sector of real estate.  I come from 14 years in the Residential and Commercial Finance Sectors and have over 25 years in Finance total.    Enjoy, Robin Weriich CBW

Got your attention now didn’t I?  Well, I am not sure how your week is going but that caption should give you and idea of how mine is.  I have worked in this industry for 14 years.  I have never during all that time had to deal with so many inconsistencies in underwriting or processing as I do today.

The poor borrower is being so over protected by changing guidelines, they no longer qualify to buy a shoe box with out a passport, verified through 5 sources, photo ID, SS card, Green card…wait is that a green card…well now lets ask for 4 new pieces of verification to verify this green card belongs to the borrower.  Now, lets talk about income, you work right?  How long?  How much?  Who do you report to?  Last year on July 12th, 2007 at 3 pm PST time, what were you doing at your place of employment?  Who can the underwriter call to verify that?  I see, that you have declining income in 2008 compared to 2007?  Why is that Mr and Mrs borrower?  No, I am sorry, the economy isn’t an acceptable excuse, now I need to have 3 letters. One from you, Mr. borrower telling us why you will be a better employee and how you will work hard to impress your boss and work over time to get your income in line with 2007.  Now Mrs Borrower, I need one from you that explains how you are going to also pick up a second job to bring your income in line with 2007, I know you have a broken leg,  so due to that, I would suggest you look for employment in an industry were you are able to sit. The 3rd letter I will need Mr Borrower will be from your parents explaining how they raised you to do better and that they expect more of you and will apply the proper amount of parental guilt to you to ensure you work harder to impress your boss so you can make more money.  Oh, I will need these to all be original and hand written with blue ink only please.  Preferably a fine BIC pen.  To use anything else would knock you in down in qualifying points.

Finally Mr and Mrs borrower, we need to talk about your credit score.  You do understand what a credit score is in these troubled times? Right?  It determines your worthiness to exist on this planet.  Your level of score will determine, what part of the Country you will reside in, what part of the city, if you will live in a house or a shoe box.  It will tell me what type of car you drive, what type of jewelry you buy your wife.   You are forever judged by your credit score.  I am sorry to tell you this, but I noticed Mrs Borrower’s wedding ring is only a quarter carat stone, I have my Jewelers loupe out, so please remove the ring so I can check for imperfections.  Oh..ah..ooh…well, you can have it back, it appears to be an I-2 stone with a color grade of K.  This isn’t looking to good.  Well let’s see what you have listed on your loan application under assets, I am looking to see what type of car you drive.   Hmmm, this is a bit disturbing.  It would appear as though your car is 5 years old and well, it is a KIA.  Yes, I understand that you wanted to save your money for your down payment on your home, yes, I do understand it gets good gas mileage.  I know, but really a KIA?  I just don’t know if we should even bother with pulling your credit score, just by looking at your application, your assets, your jewelry, the fact that when you took off your jacket and laid it on your lap, I was able to peak at the label and noticed it was Old Glory and all of us know that is a Wal-Mart label.  I really think I will save you the credit check fee and suggest we talk again next year.   Thank you now..

Next?  Is there anyone in the lobby with an 800 credit score?  Can I find an 800 in the room?   Thank you and please step into the room. This gives you and idea of how my day has gone?  This credit crunch and volatile times is only hurting one really important person that make the economy work.  The consumer.

Robin Weirich CBW

Toxic Media Fuels A Down Economy

Did you read it?   Did you hear the good news?   No?   That doesn’t really surprise me.  When we are bombarded with such constant negativity by a media that thrives on posting “Toxic Headlines” it is only natural that when we read positive news that comes out, it does nothing to improve our spirits or outlook on the economy. This is due to the fact that for every positive article in the News Paper or on the Internet News source, there are at least dozen negatives ones that overshadow it.  

Just today alone we see the great news about Housing starts, which if you haven’t read the article on MSN or CNBC, then I will quick you a quick snap shot. For first time in nearly a year something positive in on the news, Housing Starts & Building Permits were up! Does this mean end of the recession is nearing? Not likely, however it is a sign that the things are starting to improve. It’s kind of like the first signs of life after a long hard cold winter where everything has been frozen for so long and one day you walk out to your car to go to work and you notice a tree starting to show just the slightest hint of a tiny bud trying to break through the ravaged old wood and show signs of life.

However that news along with the other positive article that came out about about American Economy is Finally Showing Signs of Recovery on CNBC. This article told of small improvements with consumers not swarming but inching their ways back towards shopping malls.  They also noted in this article that while they do not feel the recession is over as of yet, the fear or shock factor of past months is dulling the consumer and like all war survivors they are picking themselves up and finally starting to dust off.  OK, maybe I  interjected some of my own interpretation of the article, but it isn’t too far from the truth.

The public can only absorb so many stories of excess greed when they and myself alike, are watching pennies so we can put groceries on our tables and out there fighting for market share in business, that is if we have a job. Today’s glaring headline of excess and greed that all the Media is focused on is  “AIG” and the excess of the 73 current and former executives a bonus of $1,000,000 each ( I had to type that out just so it looked as gross as it sounded with all those zeros. Writing one million just doesn’t have the same effect).   So, now we have total public outrage as well as we should since “we; John Q public” is footing the bill for those 73 in addition to the others that didn’t make the headline news.  However since the story broke late Thursday, it has built up steam that brought President Obama into the media fire on Monday morning when his speech brought promises to do what could be done to NOT distribute those bonuses.  However, since most people don’t really read what is going on fully, they didn’t read or listen to the full details that were broadcasted last Thursday stating that the bonuses had to be paid on Sunday, the 15th or they were liable for legal action.  So, Monday’s statement was really nothing more that of continuing to feed the frenzy that as I type this out is still being played out in the public by the media and our administration.  ( Don’t get me wrong, I like Obama and wouldn’t want his job for anything!!  That is a Toxic Media frenzy in the making…. ).  However…. However….  One can not tell me, that OUR Government was NOT aware of the fact that when they bailed out AIG on both occasions that they didn’t have a summary of expenses due for the next 48 months or more?  That they didn’t know of the obligations that AIG had committed to previously?  Were they not aware of their operating statement?  Had not taken the time to review the companies finances totally before writing them a very large check out of our checkbook?  If that is the case, then shame on our Government!!  I remember last year when things really went sideways. It started with the AIG bailout and allowing Lehman Brothers to collapse on September 16th. That was the beginning of what I call all the “Toxic Media” that along with our open check book, lack of due diligence that has fed the current economic crisis.

So, I say, ignore the “Toxic Media” and focus on the small positive news that is starting to eek out of the pack and eventually will beging to take over and lead the news and assist in building consumer confidence.   The hardest part is going to be patient for that change to come about.  But patience, ear plugs and the mute button on your remote control will pay off sooner.

Robin Weirich CBW

e-PropertyLinks

Ted Collins Inspection Services Newsletter

Ted Collins Inspection Services Newsletter – Owner/Operator/Inspector ICC Code Certified, FHA/HUD Certified, Class A Contractor, BS Construction 

Engineering Technology, 703-777-9222   www.TedCollins.com   Ted@TedCollins.com

 Ted Collins Inspection Services offers numerous property inspections for your home and/or commercial property. We are “licensed in Virginia/Maryland/DC” and have 30 years’ experience, having performed thousands of inspections. I’m a “Certified Combination Building Code Inspector” for the required-by-law enforceable building code in VA/MD/DC. We look for code defects, along with the normal inspection defects, when we inspect a project. We document and photograph these defects in your report.

 Every day we find drafty doors and windows, second floor not heating or cooling correctly; poor or no insulation; cold basements; leaks in basements windows roofs; squeaky floors; cracked tile and grout, settled foundation soils, ponding water, painting defects, drywall cracks, missing insulation, leaking ductwork, broken attic trusses, missing supports, settled footers, cracked concrete, code defects, safety defects and stair problems.

 I worked for DC as a combination building code inspector last year as 3rd party and DCRA. I’ve been involved with litigation inspections where DC 3rd party inspectors don’t show up (one case was on FOX 5 and can be seen at my website). A new house, on C St. SE, had no HVAC returns (required by code), no crawlspace insulation (required by code), rooms were not heating to 70F (required by code), poor outside grading (required by code), non-insulated water pipes (required by code) and many more defects. We went to court and we won. Hire me. We’ll go over your building and we’ll teach you the truth. We’ll look out for your welfare and show you how to force your contractor to make repairs. See my photo reports–lawyers say the best in the business–at tedcollins.com.

Our basic service includes going over your property with a fine-tooth comb. We teach you about the property and tell you about the readily visible code violations, as well as maintenance and construction defects. We inspect the entire property with you, looking for electrical, building, structural, HVAC & plumbing defects. At the end of our inspection we will provide a defect list report and photos for your documentation.

Resale/Pre-listing/House Physical – Condos, townhouses, commercial & single family homes. Fees start at $200. (We typically charge $1.00 per Sq ft). Radon/mold testing is also available.

Litigation/Insurance claim Inspections”- In addition to our basic service, we generate a more comprehensive report which includes Code Sections with documenting photos suitable for use in court. Inspections take 1-5 hours. Litigation report costs are based on the time involved. Commercial Leased/Owned Properties – In addition to our basic service, we can inspect your gas station, gym, office space, office building or restaurant. If you’re leasing, use our report to request repairs. If you own or are buying the building, you’ll know what needs to be repaired. Inspections take 1-8 hours. Fees start at $200.00 and depend on size of property and location.

New Construction/Remodeling Inspections – Here we inspect your property before the walls are in place and before you close. We often make multiple inspections as your property is built out. These inspections may include remodeling, foundation, pre-drywall, pre-purchase, and one-year warranty inspections. Inspections take 2-5 hours and fees start at $200.00.

Tip of the Month – There’s a lot of rentals out there with tenants getting hurt do to faulty construction and/or Code violations. They or their lawyer hire me to inspect and photograph the property for code defects which caused their injuries. They then sue the property owner and/or insurance company with my report and photos. Example: Steps built without railings which caused injury, medical bills, & loss of work. Have me to inspect any properties you’re renting for safety/code defects to make sure you’re safe from tenant lawsuits.  “I’m cheap compared to a lawsuit”. 

Have a good day, Ted Collins 703-777-9222   www.TedCollins.com   Ted@TedCollins.com 

To have your company newsletter highlighted on the front page of e-PropertyLinks, please contact Robin Weirich, CBW at Robin@e-PropertyLinks.com

Fed scales back purchases, no impact on rates

 

Guest Writer for e-PropertyLinks Blob, Rob Chrisman

The scene from this movie was obviously a horrible period in history, but this take on it cracks me up every time:  http://www.youtube.com/watch?v=bNmcf4Y3lGM

My uncle used to say, “Do not corner something that you know is meaner than you.” Or bigger, for that matter. Speaking of big, the numbers yesterday show that the Fed’s purchases dipped somewhat, as expected. For the week ending on September 30th, the Federal Reserve’s MBS program was a net buyer of $20 billion agency MBS which indicates a $2 billion decline from their prior week’s purchases, entirely consistent with their announcement last week that they will gradually slowdown MBS purchases and also extend their $1.25 Trillion purchase program to into the first quarter of 2010. Anyone nervous about scaling back the Fed’s purchase program should remember that a) they don’t want to de-stabilize the markets, b) historically they are not buyers of MBS’s, c) they are currently buying more MBS’s than are being originated – do they need to buy older production? and d) in spite of the numbers yesterday that showed a decline, mortgage rates still improved nicely.

There are a few things to note, not the least of which is that the Fed’s MBS purchases continue to be heavily skewed towards conventional loans (Fannie & Freddie) and away from GNMA (FHA & VA) securities, in spite the fact that FHA & VA production has skyrocketed. The Fed is also has bought a large portion of Treasury securities, although there are always more where those came from! In fact, next week the Treasury is selling another $78 billion of 3, 10, and 30 year fixed income securities for anyone wanting to add to their portfolio.

After I sent out the commentary yesterday, we had some decent economic news. Pending Home Sales were up over 6% in August, and are at their highest level since early 2007. (Some explained that this was due to the rush of buying ahead of the tax credit expiring at the end of November, and that buyers are still facing delays due to short sales or HVCC issues.) We also had Construction Spending increase almost 1% in August, which balanced out a revision to the July numbers. (Spending on private residential projects rose 4.7% in August.) And we had the ISM Manufacturing Index drop slightly to 52.6 – still above the magical 50 level that indicates expansion. (Many would say that manufacturers are catching up in taking care of depleted inventories rather than in satisfying new demand…)

Wall Street firms (all 3 of them) saw very good buying yesterday, in spite of the decent economic news. Whether or not investors pass along the superb MBS pricing to their clients is another issue: 4% securities (which contain 4.25-4.625% 30-yr mortgages) are trading near par (100). Add on some value for servicing, and suddenly these rates are at a point or two premium. In addition, the yield curve is continuing to flatten, impacting ARM rates relative to 30-yr fixed rates. Supposedly Japanese trust banks had been buying Treasuries in the 5-year to 7-year range, but still, there is plenty of supply out there. Some view this as a way of buying “cheap” dollars; others believe that investors are not concerned about inflation while world economies are still weak.

Today was the “big daddy” unemployment numbers that always make it into the headlines Saturday morning. Estimates heading into today had job losses pegged at 175-200,000 for September with the Unemployment Rate hitting 9.8%. “Weak but improving” was the term some economist were using for the job market – until this morning. U.S. employers cut 263,000 jobs in September, pushing the unemployment rate to 9.8%. 9.8% is the highest rate since mid-1983 and payrolls had now dropped for 21 consecutive months. After the number stocks are getting hit again, but the yield on the 10-yr is down to 3.13% and mortgage prices are better by .250-.375!

                                                            
US Bank begins their Freddie Mac Streamline Refi Program today. USB’s Freddie program will go to 105% LTV, with a 620 minimum FICO and all borrowers must have a FICO score. It is available for conforming and high cost county limits in 1-4 units for primary residences and investment properties, 1-unit second homes, condos & PUDs. (Manufactured homes are not allowed). And there is no MI required if there is no MI on the loan being refinanced (even if new LTV is at 105%) – but you should know that this program is not available for existing loans with MI. And, of course, the loan must receive an LP Accept and the existing loan must be current.

Franklin American addressed HUD’s recent Mortgagee Letters announcing significant revisions to FHA program parameters. Starting today any FHA Streamlines & VA IRRRLs going to FAMC will need a minimum FICO of 640. On top of that, FICO price adjustors will be modified for all FHA and VA loans promoting loans with scores above 700. Franklin will also, starting today, require 6 payments (which may or may not be the same as 6 months) with the current lender for this product.

For archived commentaries, check http://www.robchrisman.com/, or write to rchrisman@robchrisman.com. The commentary is produced every business day.

To have your neweletter featured on the front page of e-PropertyLinks, please send your articles, contact information and picture to Robin Weirich at Robin@e-PropertyLinks.com

Robin Weirich CBW

What does One Million get you today in a home?

In many parts of the country, 1,000,000 can go a long way.   However in other areas, a seven-figure price tag you are willing to plop down simply won’t get you an super luxury apartment or big house in the suburbs with a pool or a house in the Valley with a view of the mountians out one window and the Valley out the other.

The drop pver the past 36 monhts in home values has taken a toll in personal wealth & well being.  The number of homeowners underwater is now 23 percent of the 55 million outstanding mortgages.   These numbers are alarming and why there has to be more of an effort to help home owners keep their homes, work with lenders to encourage principal reductions and allow the bottom to finally come so we can level out and begin to see a slower healthier growth of appreciation in Real Estate.  Even though the past few years have been hard on the consumer and every one of us related to the Real Estate transaction, this is still an incredible time to buy and Real Estate in my opinion will always be one of  your best “Long Term” investments. ( Robin )

So what has happened to the  million-dollar market?  With realtors predicting that a recovery is finally beginning to show on the horizon, identifying the real estate markets that are undervalued, instead of simply under wate; is a matter of stepping out of your comfort zone based on the the recent history but can also mean a profitable return and some great opportunities.  Lending is still out there and owner contracts are making a huge comeback, so start looking for $25K to your dream home of over a $1M.  The opportunities are there.   You just have to simply take the step and start looking.

Below is what an assortment of Million dollar listings we have on e-PropertyLinks.

Sunny & Level Happy Valley Equestrian Retreat
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Gustavo Arrendondo Design
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Houston / Spring Branch
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Forest Creek Subdivision
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Colorado Casual Living At Its Finest!
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65+/- Rolling Acres With Pond/Barn/Shop
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WONDERFUL ATTENTION TO DETAIL
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Ocean Isle Beach
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1444 Adams Street
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Belmont Heights – Garage Galor! 10 Car
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Slideshow: Million Dollar Homes Across America: Then and Now

To have your listing highlighted in our e-PropertyLinks Blog, please send me your information at Robin@e-PropertyLinks.com

Robin Weirich CBW

 

 

Senate Plans to Extend Tax Credit

I am going to forward on an article from RIS / Today’s Real Estate Advisors that I just received instead of trying to re-write or re-invent the wheel regarding “Breaking News” on the Senates  plans to extend and expand the Tax Credit.  Please read below.  Robin Weirich CBW e-PropertyLinks

BREAKING NEWS: Senate Plans to Extend and Expand Tax Credit

RISMEDIA, October 29, 2009—(MCT/The Wall Street Journal)-The Senate has reached a compromise on extending and expanding the $8,000 tax credit for first-time home buyers, a boost the housing industry believes will help it pull out of its two-year-old downturn. While its passage remains uncertain, the agreement would extend the existing credit for first-time homebuyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners, Senate aides said. The reduced credit would be available to all homebuyers who have been in their current residence for a consecutive five-year period in the past eight years. Lawmakers in Washington also raised the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000, housing-industry sources said. Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, said the sources. The measure still faces votes in the full Senate and the House. Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan are in full support of the Senate’s proposal to both extend and expand the first-time homebuyer tax credit and called on Congress to approve key housing measures that include the tax credit. “We welcome efforts taken by Congress to extend the First-Time Homebuyer Tax Credit for a limited period. This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide,” said Secretaries Geithner and Donovan. “In extending the credit, we urge Congress to include strict measures to combat tax fraud and protect responsible homeowners.” The current tax credit did little for the new-home market in September, the Commerce Department recently reported—news that took many industry analysts by surprise. Sales fell 3.6% from August and 7.8% from September 2008. Industry observers had expected a fifth consecutive monthly increase in new-home sales, believing that the tax incentive for qualified first-time buyers—credited with 357,000 sales of previously owned homes so far this year—would do the trick. Instead, sales of typically more expensive newly built houses slipped. “The decline in new-home sales seems to us to be more a function of the attractive pricing available on resales in the current environment than a reflection of weakening demand,” said Michael Feder, president of Radar Logic in New York, which tracks the market. “Since hitting rock bottom in March, demand is up 20 percent,” said Joel L. Naroff of Naroff Economic Advisers in Holland, Pa. For Naroff, the robust rise in existing-home purchases—9.2% year over year in September—indicated that the housing market was not faltering. “Maybe the issue is supply, which fell to its lowest level in 27 years,” he said. “Builders, at least those left standing, have been making sure they don’t have any houses sitting around, and they have been very successful in controlling inventories.” IHS Global Insight economist Patrick Newport echoed that, noting new-home inventories “sank for the 29th straight month to their lowest level since November 1982.” Naroff maintained housing has recovered enough to stand without the tax credit, but Newport said that if the credit were not extended and expanded, housing demand would take a hit, and home sales would drop. The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real estate market a bigger boost while preventing real estate investors from benefitting. While Senate lawmakers appear to have reached a deal on the substance of the tax credit, they are still at odds over how it would be brought to the Senate floor. (c) 2009, The Philadelphia Inquirer. Distributed by McClatchy-Tribune Information Services. For more information, visit www.wsj.com. RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. Continued