Mortgage Rates Rebound

If you locked over the past week, you may have pulled the trigger too early. This morning we saw the 10 yr rebound nicely and that is starting to trickle down to mortgage rates. Today's best rate quote for a 30 year fixed rate conventional "vanilla loan" is 3.375% @ 3.419 APR. which is approaching a new low and will continue in this direction as the stock market retreats after approaching its all time highs again.

The moral of this story is don't always be in a rush to close, if your mortgage advisor isn't. A good mortgage professional will lock when he thinks it's a good time to lock, NOT just when it's just a good time to get paid.

If you have not checked in with a mortgage professional in the last 6 months its time to check in for a tune-up.

If you are still paying over 4% please check in with someone your trust and see if you can save some money - it can't hurt to ask and it's always free to get a quote.

FHA is pricing you out

FHA is losing money. They are in the red by billions. 10% of EVERY FHA is delinquent over 30 days. So it's no surprise that FHA has increased mortgage insurance premiums. They do this not just to cure deficiencies in the ole' P&L but to force private money to take it's place. But not all FHA borrowers should be in FHA loans. There are many loan origintors that run from conventional when the LTV reached 90%+. But not so fast. Many borrowers where loans are at 95-97% LTV on purchase transactions would be better suited if they took a look at conventional with MI. MI isn't that bad when compared to FHA. So when someone recommends FHA they better have a very good reason why conventional is not an option.

HARP 1.0? HARP 2.2? HARP 3.0? HARP Seals? HARPsicord?

National Mortgage News is running an article today noting that Two Senators have reintroduced a bill aimed at expanding HARP. HARP is of course the governments refinance program aimed at helping underwater homeowners who have a loan currently owned by Fannie Mae or Freddie Mac AND was closing prior to June 2009. Expansion of HARP could allow any loan currently owned by Fannie Mae or Freddie Mac to be refinanced regardless of closing date. And remember just becuase you send your payment to Bank of America or ANY other institution, it doesn't mean your loan isn't potentially owned by Fannie or Freddie.

There still appears to be no relief or recent commentary on Harp 3.0 which is rumored to be a similar product wherein FHA would refinance underwater homeowners regardless of Fannie Mae or Freddie Mac ownership of the first mortgage. This would obviously help a ton of borrowers in Jumbo, Option ARMS, Interest Only and Portfolio loans.

The bill (S. 249) is also designed to create more competition between lenders and servicers in refinancing Fannie Mae and Freddie Mac loans. This bill will help millions of borrowers with GSE loans to refinance at lower rates, according to the sponsors Sens. Barbara Boxer, D-Calif., and Robert Menendez, D-N.J.

“It is a win-win-win,” Boxer said. “Homeowners will have more money in their pockets, Fannie and Freddie will see fewer foreclosures, and the housing market and economy will continue building momentum.”

The Home Affordable Refinance Program was originally aimed at providing streamline refinancings of GSE loans with LTVs above 80% to 125%. The 125% cap was eliminated in early 2012. The Boxer-Menendez bill would expand HARP to include refinancings of all GSE loans, including loans with LTVs below 80%. “This bill prohibits the GSEs from charging upfront fees to refinance any loan they already guarantee, which is also in the best financial interests of the GSEs and taxpayers,” according to a summary of the bill.

To increase competition, the authors directed the GSEs to ensure lenders that refinance a GSE loan are subject to the same representations and warranties as the lender that services the loan. Currently, the new lender faces stricter rep-and-warranty liability than the lender that owns the servicing. The different standards pose a barrier to competition, “resulting in higher prices and less favorable terms for borrowers,” the summary says. The two senators introduced a similar HARP bill last year but it never reached the Senate floor for a vote.

New FHA MI Rates

Well it's clear FHA is broke... and if you want a new FHA loan it will cost a little more. And that's OK, FHA still offers some of the most leverage and is the most credit and high debt to income ratio forgiving set of guidelines out there. If your loan request is over 80% don't go straight to FHA check out MI rates at 90-97% LTV and you many be surprised. Here is the link to the FHA mortgagee letter.

http://portal.hud.gov/hudportal/documents/huddoc?id=13-04ml.pdf