Feb 4, 2010 | Buying Real Estate, Legislation, Mortgage Lenders, Realtors
These most recent FAQs offer additional guidance on the following issues:
- A loan originator can require the use of a particular provider of flood certification and tax service as long as that provider is not affiliated with the lender;
- Pages cannot be added to the GFE but it may be printed on legal size paper and the shading and margins can be changed;
- How to deal with the situation when an FHA approved loan correspondent closes a loan in its name that is not table funded by its sponsor;
- What items can change when a new GFE has been issued and the interest rate has not been locked;
- Clarification of some of the requirements when mortgage brokers and lenders interact;
- What items can change when a revised GFE is issued and the borrower has previously locked the interest rate;
- Lenders may not require a borrower to sign consents to verify employment, income or deposits prior to issuing a GFE;
- Verification documents can be requested after a GFE has been issued;
- Lender can indicate that although it has identified certain providers of settlement services these identifications do not constitute an endorsement;
- When a new GFE has been issued borrowers are not required to re-indicate an intent to proceed;
- An escrow waiver fee is a type of loan level price adjustment and may be part of the calculation of Block 2 on the GFE;
- The Y.S.P. payment cannot be shown on the HUD-1 as POC;
- If a lender requires a condominium certificate and questionnaire for loans on condos, that charge should be listed on Block 3;
- Charges that are part of the sales contract, but are not required by the lender, are not disclosed on the GFE;
- The fee paid by the seller for the preparation of deeds or closing charges should be disclosed in a blank line of the 1100 series in the seller’s column; and
- If an appraisal is subcontracted by Company A to Company B, then Company A’s name should be identified on Line 804.
Jan 25, 2010 | Buying Real Estate, Interesting Stuff, Mortgage Lenders, News, Realtors
An index of over 300 home builders, which shows the demand for new homes. The index runs from 0-100, so a rating of 50 would mean that demand for new homes was average. Data used in the index is provided by the National Association of Home Builders (NAHB).
The index is not as comprehensive as formal housing reports like new home sales or MBA mortgage applications, the index is more like a supplemental indicator for predicting housing trends.
The NAHB Housing Market Index is used to provide general insight to where the housing market is heading. Because new home sales reflect ‘big ticket’ items that require construction and investment, the housing market is often considered an indicator of the direction of the economy as a whole. Growth in the housing market usually means subsequent spending, generating demand for goods and services and the employees who provide them.
he index is not as comprehensive as formal housing reports like new home sales or MBA mortgage applications, the index acts more like a supplemental indicator for predicting housing trends. As such, the NAHB Housing Market Index is still able to provide general insight to where the housing market is heading. Given that new home sales reflect ‘big ticket’ items that require construction and investment, the housing market is often viewed as an indicator of the direction of the economy as a whole. Growth in the housing market will spur subsequent spending, generating demand for goods and services and the employees who provide them
Jan 18, 2010 | Buying Real Estate, Mortgage Lenders, News, Realtors
The Washing Post, LA Times and other sources are reporting an increased account of the use of borrower loan “worksheets.” In an effort to avoid being bound by newly implemented RESPA (Real Estate Procedures Act) regulations governing real estate mortgage consumer Good Faith Estimates and Settlement Statements, some mortgage lenders have been providing potential borrowers with worksheets that estimate what their loan might cost. These “worksheets” are completely unregulated and were not at all anticipated under the recent RESPA reform.
The loan scenario-forms/worksheets have no requirement for accuracy and loan officers are not bound by any sort of disclosure. Ultimately, the lender still must provide a regulatory Good Faith Estimate and the Settlement Statement (HUD Form 1) must conform to it, but right now the average consumer is not aware of that fact. Once the loan shopper is “satisfied” with what was “disclosed” on the worksheet, and only days before closing, the consumer is presented with the obligatory GFE.
Loan officers and lenders claim the worksheets are necessary to remain competitive and that the new regulation is too strict to be a practical benefit to the consumer. The regulatory demand for 90% accuracy is overbearing say some mortgage professionals.
A HUD official said that they will continue to monitor the practice and update the reform accordingly.
In the mean time mortgage shoppers should be certain that they are working with experienced, trustworthy lenders and loan officers. If you need the name of a local trustworthy loan officer – call me anytime and I will introduce you to one of my finest lender clients.
Jan 8, 2010 | Buying Real Estate, Mortgage Lenders, News, Realtors
Reporting on all forms of payment, including cash, retail sales rose 3.6% from November 1 through December 24, according to a top credit reporter. Internet sales popped up 18%, consumer electronics rose 5.9% and jewelry sales climbed 5.6%. Major economists had anticipated overall retail sales to remain unchanged. They were mistaken.
Initial claims for unemployment benefits fell by 22,000 to 432,000 in the week ending December 26. It was the lowest pace since July 2008. Continuing claims for the week ending December 19 fell by 57,000 to 4.98 million, the lowest level since February 2009.
Freddie Mac reported Thursday that after four straight weeks of increases, 30-year fixed-mortgage rates dropped to an average of 5.09% this week, reducing real estate mortgage costs for home buyers.
Last week the rate averaged 5.1%; last year at this time the rate was 5.01%. The average 15-year fixed mortgage rate dipped 0.4% to 4.5%, and the average five-year adjustable-rate mortgage remained flat. The average one-year ARM edged down 0.03% to 4.31%.
The Federal Government now holds $909 billion of mortgage-backed securities. Since the beginning of 2009 it has purchased 73% of the mortgages that government-backed Fannie Mae, Freddie Mac and Ginnie Mae have turned into securities.
If mortgage rates spike up or the economy weakens, economist speculate, that the central bank might need to keep buying mortgage-backed-securities. However, with the economy improving and the mortgage market already heavily dependent on government, officials are eager to leave the business of purchasing MBS’s.
After expiration of the current, extended, home buyer tax credit the U.S. real estate market may be left to stand on its own. That will be the true test of the recovery.
Dec 17, 2009 | Buying Real Estate, Mortgage Lenders, News, Realtors
As the industry approaches the deadline for applying the new Good Faith Estimate and HUD-1 Settlement Statement forms, HUD has made good on its promise to provide a revised Settlement Cost Booklet that lenders and brokers will be required to provide to consumers within three days of applying for a real estate mortgage loan. The new 49-page booklet has 13 sections, including careful explanations to the borrower for what each one of the line item represents on the new HUD-1 and GFE forms. Click here to see the HUD’s new Settlement Cost Booklet.
Nov 30, 2009 | Buying Real Estate, Mortgage Lenders, Realtors
National Association of Realtors® reports a big gain in existing-home sales for October and attributes the gain to the first-time buyer credit. Single-family, townhouses and condos accounted for nearly 6.10 million units sold.
The first-time buyer credit program was due to expire on November 30, 2009 and many home buyers pushed to find suitable properties and close in time to take advantage of the credit. This push likely skewed the numbers for October and will certainly impact the numbers for November. The heavily anticipated extension of the first-time home buyer credit came in mid November, by that time many of the real estate closings being pushed had been scheduled to meet the deadline.
With the push over for now I expect a measurable decline through December and early next year. That may be the bad news, but the good news that we are due to experience another push as the extended deadline draws closer in early spring 2010. As always, I am guardedly optimistic.
