People, especially in Rhode Island, are wondering, "What is happening with that darned flood insurance?"
Obviously private flood insurance is not impacted by what is happening. A few weeks ago, the House passed H.R. 4851 which extended the authority of the National Flood Insurance Program (NFIP) to issue new and renewal flood insurance policies and increase coverage on existing policies the insurance through April. But then the Senators all flew home for a two week Easter vacation. They are expected to renew/extend the insurance, but until then many investors are informing clients of their own policies.
Freddie Mac's policies on flood insurance remain unchanged: "Seller/Servicers originating mortgages for sale to Freddie Mac must continue to perform flood zone determinations, dwellings on mortgaged properties in Special Flood Hazard Areas, and mortgages delivered to us secured by such properties, must have flood insurance coverage, and for Servicers, payments to renew expiring policies must be effected as scheduled when servicing Freddie Mac mortgages."
Freddie states that if a borrower applies for NFIP flood insurance, acceptable evidence pending issuance of a final NFIP policy must include a completed and executed NFIP Flood Insurance Application plus a copy of the borrower's premium check or agent's paid receipt, or a completed and executed NFIP Flood Insurance Application plus the final HUD-1 form reflecting the flood insurance premium collected at closing, or a completed and executed NFIP General Change Endorsement Form showing the assignment of the current flood insurance policy by the property seller to the borrower, or an agent-executed NFIP Certification of Proof of Purchase of Flood Insurance.
US Bank told clients, "For any new, increased, renewed, or extended loans secured by real estate in a Special Flood Hazard Area (SFHA), if the borrower is required to increase current NFIP coverage or purchase new flood insurance, the borrower has 2 options: Purchase the insurance from a private insurer or postpone the loan closing until NFIP insurance can be obtained in an adequate amount. And for any loan secured by real estate in a SFHA which is currently being serviced by USBHM in which the policy has lapsed (expired/canceled) or is determined to be insufficient, USBHM must begin the force placement process if certain criteria occur.
Flagstar Bank will still require standard documentation for proof of paid flood insurance for loans determined to fall in a flood zone. "Due to the flood insurance suspension, new policies will not be able to be obtained until at least April 12th. For loans where a paid policy has not been obtained, Flagstar Bank will continue to condition for appropriate flood insurance until such time as flood policies are able to be issued. Refinance transactions able to close without a required renewal will remain eligible for policies that are to expire April 30th or after."
Yesterday Freddie Mac announced that Essent Guaranty is an approved mortgage insurer, starting tomorrow. There will be refreshments in the lunch room this afternoon in honor of this.
If you add a signature line to the GFE, you'd better not send it to Wells Fargo's wholesale group. Starting tomorrow, Wells will cancel any registration received that includes GFEs altered to included additional signature lines. Wells Fargo Wholesale Lending will accept GFEs that include only the borrower's signature, and have not been altered to include additional signature lines.
Security National Mortgage came out with its policy on the FHA flipping waiver. Starting tomorrow, SNMC will allow the 90 day waiver for all property sellers, including private sale transactions, but prohibits FHA financing for properties owned less than 90 days (acquisition to signed purchase contract) if the sales price is greater than or equal to a 20% increase over the seller's acquisition cost. As with other investors, keep it arm's length, and make sure that the seller holds the title!
US S&P/Case-Shiller Home Price Index for January was up 0.3% over December on a seasonally unadjusted basis, although it is negative 0.7% year-over-year. This gives us eight months of, on average, home prices in 20 cities being up on a seasonally-adjusted basis. This data bucks the trend seen by other index trackers, including the NAR median, RadarLogic's RPX and the FHFA "Purchase-Only" index.On a non-adjusted basis the 10 city index has declined for seven straight months while the 20 city index has fallen in six consecutive months. READ MORE
One analyst noted that "economically, housing is an illiquid good with poor price discovery, and major price turns are often preceded by changes in volume as buyers and sellers meet more or less frequently. If home prices are really recovering, we need to see confirmation in rising volume." All real estate is local. Florida is struggling, Southern California was a mixed bag for all of 2009, and Northern California has been strong. Las Vegas and Phoenix have been weak, as are Seattle and Portland and Atlanta. New York has not bounced; Boston is doing ok, as is Cleveland, although generally speaking the Midwest is having a tough time. Texas is steady.
Agents and brokers specializing in purchasing are keeping lock desks busy around the nation. The weekly survey by the MBAA showed that mortgage applications for purchases hit their highest level since October. Overall, the index climbed 1.3% in the week ended March 26. Purchase apps rose 6.8%, the fourth gain in five weeks, while its refinancing measure dropped 1.3%. We have one month left until the end of April, the deadline for Americans to sign a contract on a home and qualify for the tax incentive. Are you seeing an increase in purchase loan applications? READ MORE
When was the last time you got a tattoo? Longtime mortgage and marketing expert Kevin Daum actually committed to his book ROAR!'s success by tattooing "New York Times Best Seller" on his chest backwards so he could see it every morning. We should all be that committed to closing more deals and making more money! Check out http://bit.ly/rcroar to see the story of the tattoo and to order the book. Here we are all banging our heads trying to figure out how to say the right things to the right people in the right way and the answer has been around for 3,500 years! You have to check out this new Wiley book by Mr. Daum called "ROAR! Get Heard in the Sales and Marketing Jungle". It's a great story.
It is the last day of the quarter. Pundits will be talking about what rates have done, what stocks have done, what jobs have done. Manufacturing obviously impacts job growth, and manufacturing expansion remains firmly in place as we close out the first quarter. Manufacturers here in the US are replenishing low inventories, and we've seen some recovery in the global trade markets - both of which are helping.
It is also the last day that the Fed will be buying mortgage-backed securities. Mortgage rates are pretty steady, compared to Treasuries. Rates are holding at the top end of the range and the curve is maintaining a steepening bias. Fannie and Freddie predict that the effect will not be major: a rise of about 25bps in mortgage rates over the next 3 months, or around $30/month more on a $250,000 mortgage. ADP reported that March private payrolls (not including census worker hiring) dropped 23,000, which is a disappointment for the economy - its number was expected to show an increase of 40k. Service-providing industries showed an increase while goods producing firms continue to shed jobs. AQ wrote on the data in more detail. READ MORE. After the ADP number stocks may have a tough day, but bonds have improved: the 10-yr yield is down to 3.83%...but mortgage prices are lagging.
Two ladies were talking in Heaven.
1st woman: "Hi! Wanda."
2nd woman: "Hi! Sylvia. Imagine seeing you here - what happened?"
Sylvia: "I froze to death."
Wanda: "How horrible!"
Sylvia: "It wasn't so bad. After I quit shaking from the cold, I began to get warm & sleepy, and finally died a peaceful death. What about you?"
Wanda: "I died of a massive heart attack. I suspected that my husband was cheating, so I came home early to catch him in the act. But instead, I found him all by himself in the den watching TV. "
Sylvia: "So, what happened?"
Wanda: "I was so sure there was another woman there somewhere that I started running all over the house looking. I ran up into the attic and searched, and down into the basement. Then I went through every closet and checked under all the beds. I kept this up until I had looked everywhere, and finally I became so exhausted that I just keeled over with a heart attack and died."
Sylvia: "Too bad you didn't look in the freezer---we'd both still be alive."