FHA's are Assumable!

It's still a great time to buy IF you can get a house. Of course inventory concerns in better markets are a dilemma, let's look at some more positives of buying today with a FHA loan.

Guess what? FHA loans are assumable and why does that matter you ask? Well in 5-7 years, which is the typical amount of time for homeownership in one home, when you go to sell the home, you can sell with an assumable loan.

Well why does that makes sense? Well, if rates rise, as they are expected to do, and you are offering a 23 year fixed rate FHA loan that is assumable. Compare that to a new 30 year fixed mortgage at 5, 6, or 7%... The savings are massive to the new homebuyer.... and guess whose home those buyers may pick when looking to buy in an higher interest rate environment. So if you are in an FHA loan - here is another reason to feel great about getting that home.

New Real Estate Investor Mortgage Product

I am beginning to market a brand new mortgage program for private real estate investors that allows for quality long term fixed rate financing for their Residential Real Estate Portfolios.

This mortgage program is designed for Real Estate Investors who own, in aggregate, over $4 million dollars in investment property and can accomodate transactions up to $50 million is size.

This program allows these property owners to obtain one blanket loan, for up to 70% of the value of those stabilized and rented properties for refinance (cash out or rate and term) this program can also accomodate bulk acquisition of stabilized and rented properties in one transaction as well.

Program Terms:

Non-Recourse

ZERO Credit Score Requirements

50-70% LTV $4 Million-$50 Million Loan Amount

6-8% Fixed Term for 20 Years (4 Years Interest Only)

1.5% Total Points

Rate Term, Cash-Out, Bulk Acquisition

SFR, Condo, Units 1-4's

For more information - please call or email today. Mortgage Brokers are welcome to participate. Michael Foote michael@michaelfoote.com 949-584-4600 for details

Stocks Uncertainty Helping Rates

Hopefully investors will take a little off the top and force cash back into Treasuries which will help all of us Originators lock in lower rates for our clients. Little rally today is helping. A few more down days and we could retouch those lows of late last year and early 2013.

 

Financial turmoil in the tiny little island of Cyprus has investors shifting back into the safe haven trade of global Bond markets today feeling that it could lead other small Euro nations across the region.

US Stocks are trading lower on the news and giving a bounce to Mortgage Bonds this morning.

There are no economic reports due for release today.

The big standout this week will be the two-day Fed Meeting that begins tomorrow and ends with the monetary policy statement being released at 2:00pm ET on Wednesday.

There is no chance of a hike in interest rates but the Fed's rhetoric on the current stimulus programs will be closely scrutinized.

A Carefully Floating bias continues to be recommended, but as always, sentiment can quickly reverse.

HARP 3.0 or is it III - Bill introduced to Congress today

The new HARP 3.0 bill was introduced in Congress today. The goal of this program is to expand the already fantastic results of HARP 1.0 and HARP 2.0. The bills aims at making it easier for underwater homeowners whose loans ARE NOT owned by Fannie Mae and Freddie Mac to refinance. This program does not require mortgage insurance and has low market rates.

The new program aims to make it easier in regards to income, appraisal, and employement requirements. Basically, we are going back to stated for those that have shown they can continue to make payments on time.

I've personally spoken to many of you about this program and it's advantages. Now!! is the time to apply for this program...Yes I know its not even out yet. But I can tell you that if you wait until the program is announced finalised and launched you WILL BE too late.

Lender are notorious for raising rates to cut back production when prodcution soars. And believe me production will sore again when this product hits the market.. So to quote an old adage, The early bird gets the worm.

Call me or visit my website to begin the application process. We will get your application all set-up and ready to go once the program is live. www.michaelfoote.com

SBA 504 - For Small Business this is the best commercial real estate loan

SBA 504 financing offers businesses below-market, fixed rate financing for the acquisition, renovation or construction of commercial real estate. SBA 504 loans provide long-term stability for businesses with the ability to retain working capital which can be used to further grow the business and create new jobs. The March SBA 504 interest rate is 4.29%, fully fixed for 20 years.

The SBA has been offering small business financing for a long time. And many believe today that financing is tight. Well the fact is the SBA WANTS to lend to small business and the 504 program is a great way to buy a building rehab an existing building or finance working capital for expansion.

Many banks and small lenders offer the product but rates vary greatly depending on who you speak to. And lenders also have overlays, or further restrictions in addition the the SBA minimum qualifying requirements. This is where a smart broker comes in handy.

Since the qualification process consists of a TON of paperwork. For the busy business owner, simply pile your last three years of taxes, your YTD profit and loss, and an executive summary and send it to a competent broker. That broker will qualify your loan before a bank ever sees it.

At that point, the broker can determine whose guidelines you fit in most compared to the lowest rate and cost out there. A broker's job is to work for YOU and shop and secure the best financing - so you don't have to.

Rates and fees for commercial loans aren't that easy to come by. There isn't

HARP Loans. Refinance Underwater Properties

HARP loans set another record this years. Surpasing most expectations for volume but many are still missing out on getting a lower mortgage rate. The HARP program allows homeowners who are underwater on their 1st and 2nd second mortgages and whose loans are owned by Fannie Mae or Freddie Mac to refinance into a new first mortgage at todays low rates. They cannot payoff the second mortgage but the savings on the first mortgage usually provides substantial overall payment benefit. The savings can then be applied to paying down their second mortgages. 

At www.MichaelFoote.com you can find a source for HARP loans with-out LTV restrictions. What does that mean? Well in many cases HARP is not the same from lender to lender. Some banks limit the LTV to 105% or 120% when in reality the program does not have a LTV or HLTV cap.

Make sure to visit my site and reach out to see if you qualify for a HARP loan. In some cases you may even qualify for a conventional loan with an even lower rate. With values rising at an ever increasing pace, its not uncommon for homeowners to not realize how much their homes are worth today.

If you have an FHA loan, don't forget about the streamline mortgage program. It MANDATES you have to save money and doesnt require a income documentation or appraisal. Just make sure you've made your first six payments on your current loan on time...and chances are you qualify.

Mortgages, Mortgages, More.

There is no trick to getting a great mortgage. At www.michaelfoote.com you'll find a independent mortgage banker who takes pride in trying to get the best deal possible and any given moment. Can I predict moves in rates, no. No one can. But what I can promise is my profit margin is much lower that most lenders and brokers and I can prove it. Big banks can mark-up their rates and consumers really have no way of knowing what the "mark-up" is. You see mortgages are really no different that apples. Apples are shipped all over the world and depending on the cost to bring that apple to market and the margin the company selling said apple needs to charge over their cost is the price you are going to pay for that apple. Mortgages are no different.

Today the vast majority of mortgage peeps are selling the same product. Sure there are small differences in product (Macintosh, Red Delish, etc) but they are all still apples. I don't have a large marketing budget, I don't deliver donuts to Realtors and I don't "pay-to-play" with Realtors, and I work from home. All this allows my costs per funded loan to be lower that some of the larger lenders and even some larger mortgage brokers.

The real conclusion here is you need to work with those you trust. Your gut should tell you who to work with and if you don't trust your gut. Go with a personal referral and NEVER deal with someone that won't put their offers in writing and guarantee your lock terms.

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

Small Business Financing - Buy Your Building

Many small businesses continue to lease their buildings out of fear of the uncertainly. However there are several tax advantages to owning your building and financing has never been easier.

SBA Real Estate loans can offer as much as 90% LTV on the purchase of owner-user buildings. In fact you only need to occupy part of the building.

In many cases it is cheaper to own versus lease even on a monthly basis in addition to the tax advantages.

So if you are planning on buying your building or buying a moving your business to a new building check out www.michaelfoote.com for your SBA needs.

You can also use SBA loans to finance your operations with a refinance. If you don't ask, we can't help. Give me a call today.

Rate Pop-Up

Rates have changed recently, but before you freak out, let's look at a basic example.

Two weeks ago I was offering 3.375@ No points for your basic bare bones 30 year refinance. Today, I am offering 3.375% @ 1.5% points. The reality is both of those refinances rates and fee combos are great historically speaking. But if you are a serial refinancer, who always pays no points and no fees, you may want to do you final refinance and pay some fees.

If you refinance with points and fees the recapture period gets longer. That period is the amount of time in payments it takes you to realize those fees in the form of a payment reduction. But if you aren't planning on refinancing this debt again, paying some fees to get the lowest rate out there may make sense. For more information contact me through my website at www.michaelfoote.com .

Mortgage Rate Update for 2013

Today was a perfect example of the overall economic recovery impacting mortgage rates. The jobs report plus the stock market has been on fire with the S&P over 1500 today. And what does that do to rates? Here was the commentary from my office this A.M.
 

"Mortgage Bonds opened higher this morning but quickly reversed lower after Americans seeking jobless benefits fell to their lowest levels in five years.

The Dow and S&P 500 continue to move to multi-year highs causing investor dollars to shift from the Bond markets and into more riskier assets.

A locking bias is recommended in the short-term, which is days to two weeks, but in the longer term floating is prudent.

As always keep a close eye on the market for any changes.

MBS -22bps  (Mortgage Back Securities Worse by)

 

Finally a change I can believe in.

Finally!!!

"The Conference of State Bank Supervisors (CSBS) announced that a new National SAFE MLO Test with a uniform state component will be available on April 1, 2013. With the implementation of this new test, 24 state agencies will no longer require a second, state-specific test component to be taken by mortgage loan originators (MLOs) seeking licensure with their state agency. With the implementation of the new National SAFE MLO Test with a uniform state component, 20 state agencies - DE, GA, ID, IN, IA, KY, MD, MA, MI, NH, NC, ND, PA, SD, TX, UT, VA, WA, and WI - will no longer require a state-specific test component as of April 1, 2013. Additionally, four state agencies - Alaska, Kansas, Nebraska, and Vermont - will remove their requirement for a state-specific component on July 1, 2013. Remaining state agencies will continue to require state-specific test components, though additional states are eventually expected to adopt the new National SAFE MLO Test with a uniform state component. The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) requires MLOs to pass the SAFE MLO test before they can be licensed with a state agency through NMLS. The test was comprised of two parts: a national component and a state component. In addition to passing the national component, MLOs seeking to hold licenses in multiple states were required to pass the state component for each state in which they wish to do business. Under the new National SAFE MLO Test with a uniform state component, a license applicant who passes the test will not need to take any additional state-specific tests to hold a license with 24 state agencies."