Archive for August, 2008
Ok so my passion outside of work is riding and racing my bike.
Over the last year I have been working on a book which was completed in June of 2008. Well in August 2008 my book A Guide To The Best Bike Rides In Tucson Arizona
was published on Amazon.com which has been something I thought would be pretty cool and it finally happen.
If you are a cyclist living in Tucson or moving to Tucson my book may be for you. For Realtors it is a perfect gift for an out of town client who is a cyclist moving to Tucson.
For other bike rides check out www.roadbikerides.com
Ride Safe! - Tyler Ford
(FBI Mortgage Fraud Website, August 14, 2008) Sub-prime loans. Foreclosures. Government bailouts. You can’t read a newspaper or watch the evening news these days without seeing stories about the current mortgage crisis and the fraud that goes along with it.
The FBI, of course, plays a major role in investigating mortgage fraud—and our caseload has more than tripled in the past five years. But while we’re focusing on the perpetrators, what can you as a consumer do to protect yourself from becoming a victim of mortgage fraud?
Plenty, says Special Agent Scott Broshears, a mortgage fraud supervisor who works at FBI Headquarters in Washington, D.C. “And while some of these steps may require you to do a little extra work now,” adds Agent Broshears, “in the long run it may save you aggravation, money, and even your house.”
- Get referrals for real estate and mortgage professionals when you want to buy or sell a home. And once you do, check out their licenses with state, county, or city regulatory agencies. Most of these people are exceedingly honest and above-board—it’s just a small percentage who have given the overall profession a black eye.
- Do your own research into what other homes in the neighborhood have sold for. Also, look into recent tax assessments of neighborhood homes.
- Beware of “no money down” loans. These are a gimmick used to entice people to buy a home they really can’t afford.
- Don’t let anyone (i.e., a realtor, mortgage broker) talk you into making a false statement on your loan application, like overstating your income or lying about where your down payment is coming from.
- Never sign a blank document or a document containing blank lines. Be sure to read and review all loan documents signed at closing. If you don’t understand what you’re signing, get an attorney who can review the documents for you.
Financial difficulties? If you’re a homeowner who’s having a tough time making your mortgage payments, be aware of e-mails or web-based ads from companies who claim they can help you eliminate your mortgage debt while all you have to do is pay an up-front fee for them to do the paperwork—it’s a scam.
And, if you’ve been told by your lender that you are facing foreclosure, don’t fall for any of the fraud schemes out there, including the one where a perpetrator convinces a homeowner to sign over the house deed “temporarily”—for a fee, of course. The homeowner not only loses the up-front fees, but the perpetrator often turns around and sells the house out from under the owner.
The best advice if you find yourself in some financial difficulty? Contact your lender before your situation gets too bad, says Agent Broshears. “The lenders don’t want your house,” he explains, “and most will work with you to help you keep it. Plus, they’re already dealing with a large number of foreclosures on homeowners who didn’t seek their help in time—they don’t want any more.”
Rest assured that the FBI will continue to make the investigation of mortgage fraud a priority. An informed public, however, would make our job a little easier! But if you think you’ve already been victimized, contact your local FBI field office.
Resources:
- FBI Mortgage Fraud Webpage
Interested in more information? Call Todd Abelson & Tyler Ford at Sunstreet Mortgage in Tucson, AZ.
http://www.tucsonmortgages.com/
Private Mortgage Insurance (PMI) is an insurance policy paid to a lender in the event that a homeowner defaults on his home loan.
With the growing number of mortgage defaults nationwide, mortgage insurers are finding their balance sheets under attack and their revenues in the red.
So far this year, mortgage insurers have paid out $6 billion in claims.
In response to the losses, the mortgage insurance industry is using two tactics to return to profitability — and both mean bad news for homeowners.
- Raise the minimum standards to get insurance
- Raise the annual mortgage insurance cost
This is very similar to what Fannie Mae and Freddie Mac are doing to shore up their respective balance sheets; lending to only the most credit worthy, and making sure to charge them for their commensurate risk.
Because of the higher PMI rates, it’s getting more expensive for small-downpayment home buyers to finance their homes. And that’s if they can even still get mortgage insurance.
Some mortgage insurers now require a 10 percent minimum downpayment in certain states.
So with the number of mortgage defaults expected to rise through 2009, qualifying for PMI should get more expensive and more difficult. If you plan to make a small downpayment on your next home — or plan to remortgage your current low equity home — consider moving up your timeframe.
It may not be as cheap or as easy to get financing as it is today.
(Image courtesy: The Wall Street Journal)
WASHINGTON, D.C. (August 18, 2008) — The government-insured share of mortgage applications tripled in the past year according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Of all mortgage applications accepted during the month of July 2008, 29.1 percent were for government-insured loans (consisting of mostly FHA loans) compared to 8.4 percent in July 2007.The government-insured share has been increasing since February 2007 and only since the beginning of this year has the share exhibited significant increases; up from 9.4 percent in January. Since the MBA survey’s inception in January 1990, the lowest recorded share was 5.8 percent in August 2005 and the highest was 43.8 percent in February 1990.
There are several reasons why government-insured loans, specifically FHA, have an increased presence in the market:
- In March of this year, the Economic Stimulus Act of 2008 temporarily raised the FHA and conforming loan limits for most areas in the country, which broadened FHA financing for more borrowers. The passage of the Housing Bill in July 2008 made these higher loan limits permanent.
- Data from the U.S. Department of Housing and Urban Development (HUD) show that the level of conventional to FHA refinance applications has increased 317 percent on a year over year basis in July, the bulk of which is likely from subprime ARM products. Similarly, the level of conventional to FHA refinance endorsements has increased 260.8 percent on a year over year basis. Based on the MBA survey, application volume for government-insured loans was up 133.9 percent in July from a year ago, while application volume for conventional loans was down 50.2 percent, evidence of a shift from conventional to government-insured mortgages.
- FHA loans typically have lower down payments than those offered by Fannie Mae and Freddie Mac. Generally the maximum loan to value (LTV) ratio for FHA loans is 97 percent and 95 percent for the Government Sponsored Enterprises (GSEs).
- Conventional GSE loans typically have higher credit score requirements than FHA loans.
- The higher application and endorsement activity for government-insured loans highlights the need for FHA modernization.
**SPECIAL NOTES**
The survey covers approximately 50 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100. The survey includes eight of the top ten originators in 2008, based on data from Inside Mortgage Finance.
Need to know more? Call Tyler Ford and Todd Abelson at Sunstreet Mortgage in Tucson, Arizona
www.TucsonMortgages.com
Mortgage rates overcame a terrible Monday last week, climbing back to unchanged by Friday. And like most weeks this year, rates were volatile.
Most interesting about last week, though, was that there a ton of news that should have dragged mortgage rates down, but it didn’t seem to happen.
Instead, a soaring U.S. dollar attracted global funds to Wall Street and a renewed demand for all things denominated in U.S. dollars, helping drive up prices in the mortgage bond market.
When mortgage bond prices move higher, mortgage rates move lower.
Like last week, the path of the dollar will likely determine in which direction mortgage rates move between today and Friday. If the dollar increases in value, mortgage rates should fall. And conversely, if the dollar decreases in value, mortgage rates should rise.
Of all the economic data hitting the wires this week, the only one of major importance is the Producer Price Index – a “Cost of Living” reading for American businesses.
Normally, we’d pay attention to the inflation-predicting PPI because inflation causes mortgage rates to rise. This month, however, we’re ignoring it. Oil prices have fallen 20-plus percent since July highs and the PPI reading from last month doesn’t reflect the “current marketplace”.
So, in the absence of hard data, mortgage rates should move with momentum this week. To follow along at home, keep your eyes on Bloomberg and stay close to your loan officer.
It’s during weeks like this that rates can really move.
(Image courtesy: The Wall Street Journal Online)
With the recent passage of the Housing Recover Act of 2008, FHA eliminated all Seller Funded Down Payment Assistance programs. Yesterday they released an additional statement further defining “when”. Here, with a bit of mortgage-speak, is detailed insight:
A Seller or other interested third party cannot participate in a down payment assistance programs on/after October 1, 2008 unless the borrower is approved by September 30, 2008. FHA confirmed the definition of “borrower approved” as follows:
Eligibility will be determined by the following:
- For loans approved through the Automated Underwriting system the “date of the last scoring event” is used. Any resubmission after 9/30/08 will cancel eligibility.
- For manually underwritten loans, eligibility will be determined by the date of underwriter signature. Note: Backdating not allowed.
In addition to the above the FHA appraisal must be completed and underwriter approved by 9/30/08.
Due to this hard deadline make sure your FHA loans utilizing Seller Funded Down Payment Assistance Programs are fully approved on or before 9/30/08.
Call Tyler Ford and Todd Abelson TODAY and close your loan on time! 520-331-LEND
It’s not your imagination — getting approved for a home loan is becoming increasingly more difficult.
Taken from the Federal Reserve’s quarterly survey of 84 banks, it illustrates the changing dynamic of mortgage guidelines.
Most notable is the steep curve for “prime” mortgages, a type of home loan given to applicants exhibiting:
- A well-documented credit history
- High credit scores
- Low debt-to-incomes
Americans have come to expect sub-prime loans to be tougher, but it’s the sharp tightening of prime guidelines shows us that nobody is exempt from the newfound underwriting prudence that banks are exhibiting right now.
If you plan to buy or remortgage a home over the next year, consider a popular expression in financial circles — the trend is your friend.
Know that mortgage guidelines will get tougher before they get easier and applicants on the cusp of being approved today will almost certainly be denied a mortgage three months down the road.
Owning real estate and making sound financial decisions requires a tremendous amount of advance planning and, sometimes, looking at the past is the best way to prepare for what’s coming ahead.
According to the Federal Reserve’s survey, what’s coming ahead more mortgage application scrutiny.
www.tucsonmortgages.com
When home sellers accepts a contract on MLS-listed property, the property’s official status changes from “Active” to “Pending”.
By measuring the number of “Pending” homes nationwide, the National Association of Realtors® publishes its once-monthly Pending Homes Sales Index.
The real estate industry group positions the report as a predictor of future home sales activity, stating that 80 percent of homes under contract will “close” within 60 days, and most others will close in within 120 days.
But, although using the Pending Home Sales report as a crystal ball may be its intended use, it may not its best use.
This is because of the index’s methodology:
- It doesn’t measure new construction homes
- It doesn’t track For Sale By Owner properties
- Its sample set covers just 20 percent of MLS transactions
In addition, in a tough mortgage climate such as the one we’re in now, a greater percentage of pending sales will fail to close at all because of lack of financing.
The Pending Home Sales Index still has its place, however — it’s a terrific look at the buy-side demand for homes.
When the Pending Home Sales Index is rising, we can infer that more buyers in the market for homes and this is a signal of market strength. After all, pending sales can’t happen unless there are buyers out there. And with more buyers competing for homes, home prices tend to rise.
This is why the June’s Pending Home Sales report is so intriguing.
In June — for the second time in three months — the Pending Home Sales Index posted a large gain even as economists were calling for a loss. The inference here is that buyers are not only finding good value in all four regions of the country, but are willing to make bids on homes listed for sale.
Now, again, the uptick doesn’t mean that the pending sales will necessarily close, but it does tell us that more home buyers are finding “now” to be a good time to buy a real estate.
That sort of insight is what make the Pending Home Sales Index worth tracking. When buyer demand is rising, the real estate market isn’t usually far behind.
www.tucsonmortgages.com
Are you moving and need the list of the all the utility companies to disconnect and reconnect your utilities?
If so CLICK HERE.
UTILITY PHONE NUMBERS FOR TUCSON, AZ
Brough to you by Tyler Ford and Todd Abelson - Courtesy of Jerri Szach of Long Realty Company.
www.tucsonmortgages.com
In a week packed with mortgage news and economic data, mortgage rates swung hard in both directions last week before settling into the weekend slightly higher across the board.
Adjustable-rate mortgages worsened more than their fixed-rate counterparts and both broke a two-week streak in which mortgage rates had improved.
But, if we look at all of the big stories of last week, there was a dramatic overweight of news that is usually “good for rates”.
Those stories included:
In the end, it turned out that the news was so good, investors decided to jump back into the stock market, propelling the Dow Jones 3.6 percent to a 6-week high. This fevered trading action drew investor money away from the bond market — including bonds of the mortgage-backed variety — and that pressured mortgage rates higher.
And, of course, it didn’t help rates when the two biggest insurers of mortgage-backed debt posted large quarterly losses and warned of more delinquencies ahead.
Turning our attention to this week, make note that it is back-heavy on data. Therefore, expect the positive momentum of Thursday and Friday to carry through Monday and possibly Tuesday.
By Wednesday, however all bets are off — that’s when July’s Retail Sales data is released. Furthermore, Retail Sales is backed up Thursday by the Consumer Price Index, a Cost of Living measurement.
Both data points are correlated with inflation so higher-than-expected readings may cause mortgage rates to rise.
Regardless, given that mortgage rates are now moving more in a hour than they used to in a day, be prepared to get your mortgage rate quotes quickly and be ready to act on them.
Just 90 minutes later, the quote could be expired.
Brought to you by Tyler Ford and Todd Abelson of www.tucsonmortgages.com
