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on Fri Jan 20 2017, 5:50 PM
Middle America gets its first taste of a Trump presidency.
on Wed Jan 18 2017, 2:43 PM
Good post - I have seen deals fail due to each of these examples and then some! I think the main thing is making sure the LO & Client are in constant communication and everything is transparent. Sometimes you cannot control what the client is doing - in those cases you shake your head and move on to the next closing!
Ted Rood
Senior Loan Officer , MB Financial Bank
on Tue Jan 17 2017, 1:20 PM
Danged consumers! First they borrowed recklessly, igniting the mortgage meltdown, and now they're being far too responsible with their regained equity, and not consuming enough! When will they ever get it right?? ;)
WN
on Fri Jan 13 2017, 11:10 AM
and this is why our owner Casey Crawford and Toby Harris at Movement Mortgage pioneered the upfront UW,. I get 80% of my approvals during the option period. So if any credit issues we have time to resolve. Now nothing we can do for a bad home that has too many repairs.
Larry Gray
Senior Mortgage Banker, Mason-McDuffie Mortgage Corporation
on Thu Jan 12 2017, 12:23 PM
Looking at the top 10 Metros for change in starter homes sales failures, all I can say is "ouch!" Ok, maybe I have a little something to say on the subject. At least in part there is a lack on the part of the some loan officers and their banks to better qualify the buyers. Pricing on housing may be getting into the stratosphere where fewer and fewer borrowers qualify and sometimes loan officers may qualify them to a maximum that later was found to be unrealistic. Those kinds of issues have to frustrate realtors, sellers, and buyers to no end! Otherwise, even though still remaining qualified buyers, many buyers, at current home prices, may be scrutinizing the home inspection more than ever and not able to negotiate an acceptable new agreement with the sellers. I suspect as we are hitting prices in many places that are close to those of the real estate market peak in 2006, a factor is that salaries have not risen nearly as quickly as home prices; consequently more borrowers are being qualified at maximum debt to income ratios and of course more money is required for them to come in with. I have had a borrower who tried to at least meet a seller half way on how much lower an appraisal came in, and the seller stuck to the sales price! So many sellers may still be holding onto unrealistic price expectations. Fortunately, the next home bid was successful, and for a home that was even nicer and for $10,000 less. For the first time buyer, 2017 could be the year was see prices even out in some markets, and drop in others.
on Mon Jan 9 2017, 3:10 PM
Ted, a great piece! Thanks for sharing!
WN
on Fri Jan 6 2017, 10:24 AM
sorry, I meant Schedule E, not A
WN
on Fri Jan 6 2017, 10:15 AM
@Sarah: that is an overlay by your Investor/s. I am a Direct Fannie Mae Seller, and they do NOT require a 2 year history on Schedule A. Does seem odd to me to put 15-20% down to get a loan.
on Thu Jan 5 2017, 12:18 PM
I have not yet felt credit loosening in the conforming realm. Borrowers continue to feel like criminals during the loan process due to all the needs for where a small deposit outside of normal payroll is coming from and over justification of how they spend their money. Over qualified borrowers continue to be scrutinized where a FHA borrower with a low credit score seems to have a better chance at qualifying. Underwriting requirements still have a long way to go before a borrower can experience an easier loan process.
on Wed Jan 4 2017, 4:08 PM
Fraud is common in any industry and it takes two to tangle. Hopefully, there will be a system to track these things and not allowing it to happen.
Craig Markhardt
Banking Consultant NMLS.7026, Craig Markhardt Real Estate Consulting
on Wed Jan 4 2017, 2:35 PM
Thanks for the reporting. It is always good to learn new, sophisticated schemes.
Ted Rood
Senior Loan Officer , MB Financial Bank
on Thu Dec 29 2016, 10:08 PM
I agree that this "rally" has to be viewed with a high degree of skepticism. While it's encouraging to not lose further ground, there's no conviction or commitment here.
Ted Rood
Senior Loan Officer , MB Financial Bank
on Thu Dec 29 2016, 9:41 PM
So Trulia's economist says rates would have to double before renting would "beat" buying a home? Love to see the parameters he based that conclusion on. The payment on a 250K loan at 4.25% is nearly $700 less than at 8.5%, hard to believe rents are that far above ownership costs now.
on Thu Dec 29 2016, 2:11 PM
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Larry Gray
Senior Mortgage Banker, Mason-McDuffie Mortgage Corporation
on Wed Dec 21 2016, 2:24 PM
"The return of Spot Approval is a very good development for condominium associations and the buyers, sellers, and refinancing owners who are affected. Spot Approval was eliminated on February 1, 2010, in favor of the requirement that an association obtain FHA approval from HUD, before an FHA insured mortgage could fund within the project. The powers that be like National Association of Realtors, the Mortgage Banking Association, the Reverse Mortgage industry, and every minority home buying organization, have been leaning on HUD for the last couple of years to bring the Spot Approval program back because its elimination has stifled condominium lending. Getting the condominium approved though HUD is a costly, time consuming process that is Byzantine to most professionals, and since HUD wasn’t budging, HR 3700 was proposed to implement that which HUD was unwilling to adopt" - FHAPROSLLC.net.
Larry Gray
Senior Mortgage Banker, Mason-McDuffie Mortgage Corporation
on Wed Dec 21 2016, 2:12 PM
Patti, No question getting a condominium complex certified is a big challenge, but it can be made simpler for both FHA and VA loans. Getting the HOA on board is essential. There is a nonprofit organization in Southern CA that can assist one in doing so. There ought to be others one can find. Someone has to be the first to help get it accomplished. It is easier than you may think. I know in my immediate area we likely have several times more complexes certified than the rest of the county, though admittedly that still is only a portion of all complexes.
on Wed Dec 21 2016, 9:36 AM
There are only three FHA certified condominium communities out of a few dozen in my immediate area in Florida. I'm told the certification process is long and arduous so most don't attempt it. I hope the changes will give new confidence for communities going forward. I've had several inquiries about Reverse Mortgages from seniors who own their units. Their hearts sink when I tell them the condo must be FHA certified first.
Craig Markhardt
Banking Consultant NMLS.7026, Craig Markhardt Real Estate Consulting
on Tue Dec 20 2016, 12:58 PM
Jann, great work on researching this subject. It may be helpful to note that in my experience, HUD has been extremely good to work with regards to the procedures and conditional commitments to obtain condo certification. As the population of the United States continues to increase, added to the observed increase in millennial buyers, there will be a need for more financing options for condos. I agree that prudent review and careful consideration must be in place before any significant changes are made.
Gus Floropoulos
Vice President, The Federal Savings Bank
on Tue Dec 20 2016, 11:38 AM
Great write up Jann, thanks for the insight
Gus Floropoulos
Vice President, The Federal Savings Bank
on Mon Dec 19 2016, 10:49 AM
Great article Jann
Larry Gray
Senior Mortgage Banker, Mason-McDuffie Mortgage Corporation
on Wed Dec 14 2016, 2:32 PM
I got it on the rate hikes! I should have figured out I guess it is just the .250% hike as expected now, and the plan to hike it maybe 3 times in 2017 unless market conditions tell them otherwise.
Larry Gray
Senior Mortgage Banker, Mason-McDuffie Mortgage Corporation
on Wed Dec 14 2016, 2:17 PM
Did I miss something in what the actual hike was or was there none today? Here is the jest of the limited news I was emailed: "In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1/2 to 3/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a return to 2 percent inflation."
Robert Jubran
Mortgage Banker, FirstBank Mortgage
on Fri Dec 9 2016, 4:55 PM
Rates going up...how far and how fast is the question
Matthew Graham
Chief Operating Officer, Mortgage News Daily / MBS Live
on Fri Dec 2 2016, 8:19 AM
Again, we're not projecting anything. We're covering what Freddie said. Sometimes we even have a behind-the-scenes chuckle at the logic in some of these pieces. So again, to be clear, I agree the logic behind Freddie's "crushed" assessment is indeed faulty. If this was an op-ed piece, I'm sure Jann or I would have mentioned that. All it takes is the MBA applications chart from the link I posted to see that there simply isn't as much refi activity to be crushed as there was in 2013. Anyway, unless you see "OP-ED" in the headline, and especially if you see a hyphen followed by a company's name, the views expressed in the article are exclusively those of the company in question and have nothing to do with how we feel.
Matthew Graham
Chief Operating Officer, Mortgage News Daily / MBS Live
on Thu Dec 1 2016, 8:54 AM
John, "crushed" is Freddie's term. Not ours. We happen to agree with you. It's not an op-ed piece. If it was, we'd probably point out that the MBA refi index was MUCH higher before the 2013 taper tantrum, any has comparatively less room to fall this time around. Then again, I already pointed that out last week: http://housingnewsletters.com/mgraham/5838abb436cb281fc82b7af8 . Specifically: "The upside to this, from a loan originator's standpoint, is that refi demand doesn't stand to lose as much ground as it did during the 2013 taper tantrum." Steve, you too bro. Check the title of the story, guys. It says "-Freddie Mac" right up there! That tends to mean "here's some stuff Freddie Mac said." Jann did a good job reporting on Freddie's stance. They think the sky is falling. Us, not quite so much.
on Thu Dec 1 2016, 3:56 AM
Mortgage rates have increased over .50% in response to the Trump election results. The Bond Markets had already discounted the expected .25% point December rate hike, two weeks prior. If employment and wages do increase early in the Trump administration, then increased interest rates will be used as a tool to slow down inflation. But until bond traders actually see actual wage increases, causing real inflation, then mortgage rates will continue to oscillate in a narrow trading range. However, if Trump is able to stimulate corporate earnings via deregulation, stock prices will continue to increase, as more money flows from the bond market, into the stock market, resulting in higher mortgage rates, that will more than be offset by increased wages. The bottom line is, the mortgage rate bias is currently in the upward direction, no different than the last two years, that actually resulted in lower mortgage rates. Moreover, if the author really knows in advance how and when mortgage rates will move in the future, she would have retired years ago with a mansion and a yacht.
on Wed Nov 30 2016, 2:09 PM
In regards to this comment: "I love it when the press sneers at making money." The press is not sneering because Mr. Mnuchin made money, they are sneering at the WAY he made it. While making large sums of money is not an inherently bad thing (that's the dream, right?), when a person profits off of hundreds of thousands of people based on abhorrent lending practices of a company, THAT is well worth the sneer.
Ted Rood
Senior Loan Officer , MB Financial Bank
on Fri Nov 25 2016, 5:27 PM
It's no wonder there's a declining number of appraisers, with their average age in the upper 50's. New appraisers must have a 4 year degree and apprentice for 1000 hours. Wonder how NAR would react if the same guidelines applied to Realtors?
Larry Gray
Senior Mortgage Banker, Mason-McDuffie Mortgage Corporation
on Thu Nov 17 2016, 3:05 PM
Overall, it seems new housing construction continues to be a boon to the economy and builders are responding to many family's American dream of owning their own home. It is important for the would be new home owner to be cautious, however. News investigations around the country have found many unhappy new home buyers. Apparently, there seems to be more shoddy workmanship than ever before. DR Horton, one of the largest builders, has set aside more than $45,000,000 to cover any problems in workmanship in some of the houses they built. They are by no means the only builder that has some homes with significant problems in construction. It is imperative that the potential new home buyer hire their own qualified home inspector for a thorough inspection of the new home before purchasing. Also, they should have an attorney look over all contracts regarding the home. If they do get a home with serious problems they will not want legal obstacles in the way of getting corrections made by the builder.
Ted Rood
Senior Loan Officer , MB Financial Bank
on Tue Nov 15 2016, 7:56 PM
I've seen two sell offs approaching this severity since 2000: July 2004, and Temper, er, Taper Tantrum of 2013. We've surpassed 2013's losses already, we'll see how we end up compared with 2004. As MG sagely noted, it can take years for rates to recover. Treasury yields didn't match June 2004's until December 2008, and it took huge Fed bond purchases to accomplish that.
on Fri Nov 4 2016, 7:57 PM
I would be very happy if Realtors gave out 3 or more names and let the borrower choose for themselves. Too many realtors are getting paid under the table for their referrals or they are being wined and dined on a regular basis by their favorite lenders. When is the CFPB going to go after the Respa violators, instead of looking at only the large companies. The unwillingness for the cfpb to follow up on numerous complaints make a mockery of respa for all of us.
Robert Jubran
Mortgage Banker, FirstBank Mortgage
on Mon Oct 24 2016, 11:24 AM
Great News!
Larry Gray
Senior Mortgage Banker, Mason-McDuffie Mortgage Corporation
on Thu Oct 13 2016, 6:08 PM
I understand what Ted Rood is saying here and therefor I understand what Matthew is attempting to explain in what the best execution of rate would be. Obviously a refinance loan with a total of $2500 in lending, escrow, & miscellaneous fees at a rate of 3.5%, and at $20 a month more than the same loan @ 3.375% with points and fees adding up to $4500 would be the better execution rate (i.e. $2000/20 tells us it would be 100 months to recoup the cost). If the cost difference were only $1000 for the better rate, 50 months might seem reasonable to recoup the cost for the additional savings. We all have an opinion on determining "best execution" but are pretty close in determining that.
Matthew Graham
Chief Operating Officer, Mortgage News Daily / MBS Live
on Tue Oct 11 2016, 4:19 PM
Yes, we've been talking about the floor/ceiling pivot point around 1.70 quite a bit over on the MBS Commentary channel, though I've recently started seeing it as somewhat of a moving target (i.e. a slightly sloped inflection point as seen in the 2nd chart below). http://www.mortgagenewsdaily.com/mortgage_rates/blog/666463.aspx
Matthew Graham
Chief Operating Officer, Mortgage News Daily / MBS Live
on Fri Oct 7 2016, 3:09 PM
Indeed, October can be a crazy month for bond markets, and usually "bad crazy." 6 out of the last 8 octobers have seen rates rise (2013 and 2014 were the exceptions). The current example looks to be siding with the majority.
Larry Gray
Senior Mortgage Banker, Mason-McDuffie Mortgage Corporation
on Wed Oct 5 2016, 3:28 PM
Doesn't stuff seem to happen during many "Octobers" wherein rates start climbing or is just my imagination running away with me? I was saying to lock Friday and again Monday morning and normally clients listen to me and choose to lock...but if not I do not lock. Hopefully floating will still work to get back to their maximum acceptable rate before we lose some refinance loans entirely!
 

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