Archive for the '100% Financing' Category
Nehemiah Program Survives Latest Challenge
The Nehemiah program has survived the most recent challenge by HUD, who has tried previously to shut the program down. Hud threatened again last Fall to ban the program which it accused of causing foreclosures and artificially inflated housing prices. The U.S. District Court disagreed yesterday, sticking by its previous temporary ruling that HUD failed to adequately prove its case or consider reasonable alternatives.
Nehemiah still faces an IRS challenge to its non-profit status, so get it while you can. It may survive, but who knows.
If you’re not familiar with the Nehemiah program, read my recent post entitled FHA + Nehemiah: A Path to 103% Financing. With the popular 100% loans disappearing rapidly, this is one of the few options left…..and it’s one of the best combos out there for consumers.
Call me or email me to find out why or for more information on FHA + Nehemiah.
read comments (0)Is Mortgage Insurance The Next Domino?
Although everybody hates mortgage insurance (MI or PMI as it is known) we’ve once again become dependent upon it. Those who have recently purchased homes know that the 2nds used in “80-10s” and “80-20s” to avoid mortgage insurance are gone.
But have the MI companies ignored the risks in their excitement about being invited to the dance? Let’s hope not. Here’s an interesting article to check out:
Strains Evident on Mortgage Industry’s Line of Defense Claims skyrocket at MGIC; losses expected for ‘08 American BankerAmerican Banker / By Harry Terris
October 18, 2007In a sign of just how severe residential credit losses are getting, MGIC Investment Corp., the largest mortgage insurer, posted a third-quarter loss of $372 million Wednesday, projected a staggering increase in claim payments, and said it expects to continue to lose money through next year. Citing an unexpectedly rapid deterioration of conditions in California and Florida and continued weakness in the Midwest, the Milwaukee company said it expects home prices across the country to drop 10% over the next 18 months. Read the rest of this entry »
CAL STRS–Home Loans for California’s Teachers
The California State Teacher’s Retirement System (CalSTRS) created a home loan program for teachers back in 1984. I used to do a lot of them until the market went crazy and prices drove everyone into stated income loans. However prices are retreating to more affordable levels again, and CalSTRS restructured its program in 2004 to be significantly more helpful
CalSTRS offers a trio of programs. The Standard Conventional and the Zero Down 95/5 programs are solid performers, but the stand-out in the group is the “80/17” loan. Here’s why:
The 80/17
The 80/17 provides a combo 1st and 2nd that totals 97% of the purchase price. The 1st is 80%, eliminating PMI entirely. The 17% 2nd loan carries the same rate as the first. Both are set by STRS and as of this date are 6.625%. But here’s the cool part—payments are deferred for 5 years on the 2nd! Simple interest accrues—no compounding—and the borrower begins making amortized payments in the sixth year…
100% Financing With Freddie Mac’s Home Possible
As sub prime, Alt-A and 2nd mortgages continue their disappearing act, the GSE’s have been busy trying to help make housing more accessible and affordable. Both Fannie Mae and Freddie Mac have brought forth fantastic programs that can help consumers buy homes with no down payment or refinance homes with little remaining equity.
Fannie Mae’s initiative is called MyCommunity Mortgage and I wrote a previous article about that. Freddie Mac has something similar called Home Possible. Here are a few highlights:
- 100% purchase or rate and term refinance, with no minimum borrower contribution. (105% CLTV allowed on SFRs)
- 30 & 40 yr fixed, along with 5/1, 7/1, and 10/1 ARMs for 1–2 unit properties
- 3% seller contribution allowed
- Temporary buydowns allowed with .5% annual increases
- 140% of median income in high cost states like CA
- Reduced MI coverage
- No reserves required (SFR)
My Chase rep called this morning to tell me that Chase is pulling their 100% SISA (stated income/stated asset) loans at the end of the month. I can’t say this is unexpected, since the noose had been slowly tightening. The 100% SISAs for prime A paper borrowers had survived until now only in the rarified atmosphere of 740+ Fico scores.
Chase was one of the few left with a low enough default rate to find buyers on Wall Street. Apparently the numbers are in, and Chase got its butt kicked on 100% loans originated in 2006, particularly on the 2nds that are commonly piggybacked on 80% 1sts to reach 100% CLTV.
Expect the 100% SIVA (stated income/verified asset) loans to follow shortly. The word on the street is that everyone else, National City, CitiMortgage, Aurora, et. al. are also bailing. Wall Street has completely lost its appetite for these and will no longer buy them.
Protect your pipeline. Sometimes we don’t get any warning.
Safe 100% Financing with “MyCommunity Mortgage”
I recently wrote about FHA Access, a wonderful and safe way to obtain 103% financing. With 100% financing becoming more scarce every day, I’ve been rechecking guidelines for traditional 100% loan programs. I’ve done plenty of FHA, VA and 100% agency loans, but that was years ago, and it’s time now to reconsider programs that promote sustainable homeownership while helping borrowers who qualify but lack a down payment.
I want to share a few highlights from my conversation yesterday with an underwriter about Fannie Mae’s MyCommunity Mortgage™. This program isn’t new, but it does require that borrowers prove income. At the peak of our market here in California, people were buying homes for which they weren’t qualified—at least in traditional underwriting terms. That’s an interesting comment all by itself, isn’t it.
The link above to MyCommunity Mortgage™ is 6 months old, and Fannie Mae is nationwide. The rules can vary by state or by a particular wholesaler’s agreement with the agencies, so I called to update myself on the current local guidelines and pricing.
100% Financing Pullback hits Prime and ALT A
…the jist of this is that HSBC pulled it’s high LTV 2nds off the shelf today. 100% financing is disappearing fast. MortgageIT and Chase Manhattan Mortgage also announced similar changes in the last two days.
IMMEDIATE CHANGES TO HSBC STAND ALONE AND BLENDED HOME EQUITY PRODUCTS
Due to current market conditions,we have made the following changes to our Home Equity Stand Alone and Blended lending guidelines effective April 5, 2007.
CHANGES TO ALL HELOAN and HELOC PRODUCTS
100% TLTVs no longer allowed on any HSBC Home Equity product New Maximum TLTV of 95% for Full Documentation New Minimum credit score of 660 for Full Documentation Maximum TLTV of 89.99% for Stated Income Please note that the last day to register loans under the old guidelines is April 5, 2007, 10:00 P.M. EST. Any loans registered before this time will be honored for 60 days from the effective date of the changes and must be closed by June 4, 2007 or they will be withdrawn.
