Archive for September, 2007
The 30 year fixed rate mortgage eased off slightly this week to end week around 6.25% at .5 point.
The jumbo 30 year (over $417k) remains a full 1% to 1.5% higher, and the 3/1, 5/1, 7/1 and 10/1 ARMs offer little relief. In many cases the rates are actually higher than the comparable 30 year fixed.
Lenders continue to pull No Doc loans and higher LTV 2nd’s off the shelf. In a further indication of the trend, the State of Nevada has passed legislation requiring borrowers to document income. I saw this in an email yesterday from BofA wholesale who was immediately suspending low doc loans in that state. Read the rest of this entry »
read comments (0)The New FHA: What You May Not Know About Appraisals
During the sellers’ market of the early 2000’s, FHA loans were the forgotten stepchild of the mortgage business. No seller would even talk to a buyer approved through FHA or VA. One big reason for that avoidance was the FHA appraisal and related property issues.
All that has changed.
While an FHA approved appraiser must still be used, the rest of FHA’s appraisal requirements have been brought into parity with those of conventional loans. Here are some key improvements:
- Pest reports: No longer required. Pest reports used to be an FHA fact of life, and every structure on the property—the broken down shed in the back forty included—had to be inspected. The seller was required to fix or tear down that shed and repair all Section I & Section II inspection items. Today, even if a pest report is written into the Contract as a condition of purchase, the lender will likely only ask for a letter signed by the buyer confirming that all conditions of the Contract have been met. The only time a pest report will be required is when the appraisal calls for it.
Shameless self-promotion here…
I just received an email that International Listings / Worldwide Luxury Real Estate Since 2001 has created the Top 100 Real Estate Blogs and selected Lending Clarity as one of only 9 mortgage blogs on the list!
It’s great to receive that kind of acknowledgment after nearly a year of blogging, particularly since my active participation in the real estate blogging community has been minimal. I should spend a lot more time commenting and linking actively with other bloggers in order to drive traffic to Lending Clarity and enhance my SEO, but that requires time I don’t have.
Instead, I write primarily for homeowners, clients, and real estate professionals in hopes of imparting insight and lending clarity to the business of home financing. Thanks to International Listings for their consideration and to all you readers, subscribers and those who leave comments for your time and thoughts.
For those curious about the direction of mortgage interest rates, the August jobs report released this morning was a highly anticipated economic signpost.
Several noteworthy figures emerged. First, the loss of 4,000 jobs in August (vs. the expected rise of 114,000) was a huge surprise and the first such decline since August of 2003. Underscoring that point, the two prior month’s numbers were revised downward, to 69,000 from 125,000 in June and to 68,000 from 92,000 in July.
That shows a dramatic slowing of jobs during the second quarter job of this year, the period during which the sub prime mortgage problem burst out of its box and took the global center stage.
Expectations are increasing for a Fed rate cut later this month and for a possible series of cuts as the economy slows. If corporate earning continue to disappoint, look for the Fed to begin taking steps to forestall a recession.
Mortgage rates for conforming 30 and 15 year fixed rate loans should ease in anticipation of the expected Fed cut on the 18th.