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Fannie Loosens Multiple Property Restrictions

Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.7995

Last Friday, Fannie Mae rolled-back one of its least popular mortgage guidelines updates of the last 12 months - officially eliminating its 4-financed property limit.  Effective March 1, 2009, real estate investors can once again own and finance up to 10 individual properties.

Why is this important for Mountain home buyers? Given that over 70% of the homes purchased in our market are for second home use or an investment property, there is a good probability that the buyer owns multiple properties.  Maybe they also own a commercial building, or other investment rental properties, or other “second” homes in various locations.

I had a real life example of this in January.  The home buyer already had a primary home + multiple investment properties (over 4) and had to pay nearly 2% higher in interest to get the loan for his Lake Arrowhead home purchase.  Soon, he may be to refinance it to a better rate.

This gives future Mountain home buyers the ability to get favorable financing and not be penalized for owning more than 4 properties.

The restriction reversal does come with new minimum requirements, however.

Homeowners buying a 5th, 6th, 7th, 8th, 9th or 10th home must meet the following standards, as set forth by Fannie Mae:

1.                              720 credit score

2.                              25% downpayment for a 1-unit (30% for a 2-4 unit)

3.                              No mortgage delinquencies in the last 12 months

4.                              6 months of reserves for each investment property

In other words, Fannie Mae is re-opening the lending spigot for real estate investors with good credit, a sizeable down payment and ample reserves.

According to Fannie Mae, the change rationale is that experienced investors can “play a key role in the housing recovery”. Until now, foreclosure auctions have gone at less than full speed because investors unable to pay cash have been halted by the existing 4-property Fannie Mae limit.

Going forward, expect a more expedient foreclosure liquidation nationwide which should, in turn, provide further support for the housing market.

And lastly, not to be forgotten, homeowners with more than 4 properties can finally participate in the ongoing conforming mortgage Refi Boom. Until now, they’ve been stymied by the 4-property restriction, too.

Things to Keep in Mind Before Buying A Home

Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.7995

Many new homebuyers make the mistake of rushing out to buy things to fill their home with as soon as the seller accepts their purchase offer and the lender pre-approves their loan. But there are still a few major hurdles to overcome before the keys are handed out. Here are some things to avoid during the home buying process to assure your transaction goes as smoothly as possible:

• Don't make an expensive purchase. It may be tempting to order that new sofa for your soon-to-be living room, but its best to avoid making major purchases like furniture, cars, appliances, electronic equipment, jewelry, or vacations until after the closing. Financing that furniture with a store credit card or even one of your own credit cards could jeopardize your credit worthiness during the time it means the most. Using cash to purchase big items can also create a problem because many banks take into consideration your cash reserve when approving your mortgage.
• Don't get a new job. Lenders like to see a consistent job history. Generally, changing jobs will not affect your ability to qualify for a mortgage loan - especially if you are going to be making more money. But for some people, getting a new job during the loan approval process could raise some concern and affect your application.

Don't switch banks or move money around. As your lender reviews your loan package, you will likely be asked to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market funds and other liquid assets. To eliminate potential fraud, most loans require a thorough paper trail to document the source of all funds. Changing banks or transferring money to another account - even if its just to consolidate funds - could make it difficult for the lender to document your funds.

• Don't give a good faith deposit directly to the seller in a FSBO purchase. As a rule, your good faith deposit belongs to you, not to the seller, until the deal closes. Your FSBO seller may not know that your good faith funds should be applied to your expenses at closing. Get an attorney or other neutral party who can hold the deposit or put it in a trust account until you close on the home. Your purchase contract should dictate to whom the funds go should the transaction fall through.
• Don't disregard your lenders requirements. You may have been pre-approved for the loan but your work with the lender is far from over. In order to process your loan, you need to meet certain requirements. Your lender will need copies of your bank statements, W2s and other paperwork. It is up to you to get it to him or her as soon as possible. Failure to submit certain qualifying documents could cause you to lose your loan and the financing you need to buy your home.
• Make sure you are working with a reputable lender.  As with any industry, there are good lenders and bad lenders.  The best source for a recommendation is your Realtor.  They know who does a good job and who doesn’t.  Picking a lender because of an advertisement or a specific rate quote is a big mistake.  9 times out of 10 if you pick a lender because of rate, you are going to be disappointed at the settlement table.

 

If you want the best financing in California, my mortgage company Arrowhead Home Loans, Inc. stands ready to deliver for you.  Contact me directly at 909.336.7995 or via email at steve@stevenkeefe.com for a free no obligation pre-approval.

Advice for Borrowers Looking for Home Loans

Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

With interest rates at record lows, all lenders in the US have recently seen a sharp increase in loan applications - right at the time that many lenders have cut headcount to save money in a challenging economy. This means that timeframes needed for underwriting, approvals and closing have become longer than normal. Some companies have chosen to actually raise rates just to slow down the volume to a manageable level.

Sound crazy? No crazier than when you go to buy that hot new vehicle...only to find that there is no price negotiation. In fact, you wind up lucky to just pay the sticker price, as the demand usually allows the Dealer to add a markup to the price. And you don't get the car right away; you have to wait on a list for your turn to come up.

Right now, home loans are like that hot new car - but with the timer ticking on interest rates locks, there are a few things you can do to protect yourself.

First, longer lock in time frames than might normally have been considered are a necessity, to ensure that the file has time to be processed, underwritten, approved and closed in time to protect the rate lock in this extremely volatile climate. And that longer, safer lock-in period may be a bit more costly - but it's money well spent. Overall, the mind set here should not be one of greed. Don't try to squeeze every last drop out of rates. If you are within a quarter percent of the lowest rates offered in the history of this country, you did very well. And rates always shoot up higher at a much faster pace than when then dip lower. So if the savings or opportunity make sense - grab it.

Next, responding quickly to requests for information or documentation is important - the faster the file is submitted and approved, the better off we are to keep that great interest rate protected.

Finally, be aware that it may be a smart idea to pay points to gain the best interest rate - and sometimes is even necessary in today's market. Giant mortgage buyers Fannie Mae and Freddie Mac have recently imposed more "risk-based pricing adjustments", meaning that even credit scores and loan to values which in the past would have been considered very low risk, may now be subject to mandated fees by Fannie and Freddie. And based on the way lenders have changed their rate sheets over time, there is now very little "premium pricing", which used to allow options for fees like these, points or other closing costs to be covered in return for a slightly higher interest rate.

Right now is still an excellent time to act, before the great low rates of today get away from us. But let's be smart - call us for information on how we can get started right away.

Contact us at Arrowhead Home Loans, 909.336.1793 or send me an email at steve@cbskyridge.com

Think you have a "Personal Banking Relationship???"

Steven Keefe, Broker/Owner
Coldwell Banker Sky Ridge Realty
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

The media is projecting that due to market conditions and changes in the mortgage industry, buyers can’t get loans.  This is not an accurate assessment of what is happening.
 

It is true that credit guidelines have tightened, but good borrowers… people who should get loans are getting loans with very favorable terms.  Because the guidelines have tightened it becomes important for those applying for credit to have an advocate to Sheppard the loan through processing and underwriting to insure a smooth transaction and successful close.

Over the last 30 days, I have been involved in several transactions where the borrower was very strong.  In fact in one case I was told by the borrower that they had a “personal banking relationship” with Bank of America.  This borrower had been strung out and paperwork requested to death only to find out the day before the scheduled closing that “Due to Market Conditions” Bank of America was unable to make the loan.  I immediately requested that the borrower complete a package with Arrowhead Home Loans, our affiliated mortgage brokerage and I personally walked the deal through the process to close the loan and transaction only two weeks late.  Yesterday I had a repeat only it was Wells Fargo.  I offered to provide the same service and walk the deal through, but the borrower was so fed up with what he had been through that he just blew the deal out.

Bottom line… in today’s climate, banks aren’t getting it done.  When someone applies for a loan with a bank, basically they are getting either an 800 number with someone who really doesn’t know what they are doing, or a clerk again who has very little experience.  What is needed is a professional… an advocate who will take the necessary steps and package the loan accordingly to insure a successful end result.  It is almost as banks haven’t told their employees yet that they aren’t going to make loans, because the employees are making promises and not delivering on them.  No matter what kind of relationship someone has with a bank or perceive they have with their bank it is never going to be as close as the banks relationship with their REGULATORS.

Arrowhead Home Loans, Inc. a mortgage brokerage firm operates as an advocate for its clients.  If and when challenges arise in the transaction, our talented loan consultants are there to provide expertise to resolve those challenges.  Arrowhead Home Loans, Inc; also provides some of the most competitive rates found in the marketplace.  Our past clients come back time and time again and send individuals from their sphere because they realize the value of dealing with professionals who do what they say they are going to do.

If you are applying for a loan, think twice before you go to your current “banking relationship”.  In this market, they are probably not going to deliver, regardless of how strong you are. 

If you are in the middle of a transaction, and it isn’t going the way it should, call us, we can get involved and secure the financing for you with the least amount of hassle.

The days where just any loan guy will do are gone….Borrowers need someone who knows what they are doing.

Fannie and Freddie Take Over... What does it Mean?

Steven Keefe, Broker/Owner
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

What does the federal takeover of two mortgage finance giants mean to consumers? 

The government hopes that its plan will bring down mortgage rates by removing doubts about Fannie and Freddie.  Treasury Secretary Paulson hopes to make investors feel confident about buying the companies mortgage-backed bonds.

Jerry Howard, executive vice president and CEO of the National Association of Home Builders (NAHB), today issued the following statement on the government's plan to place Fannie Mae and Freddie Mac into conservatorship:

“While it is unfortunate that we have reached this point, we are hopeful that the government's action on Fannie Mae and Freddie Mac will help to increase liquidity in the nation's mortgage markets and restore confidence in the global financial markets.  At this critical turning point, it is essential that government regulators and all parties involved in the nation's housing finance system work together to rebuild the nation's secondary mortgage market - a move that is absolutely vital to provide affordable mortgages for America's home buyers and to help spur an economic recovery.”

What could happen next?

If you are thinking of buying a home or refinancing a mortgage, the government takeover will help stabilize rates.  They might even fall a quarter of a percentage point or so, now that the government has stepped in to make its backing of Fannie and Freddie more transparent.

Rates certainly matter in persuading people on the sidelines to step in and start shopping for a home.  The interest rate you pay for a mortgage depends in part on the rules that Fannie and Freddie set for the kinds of loans they will buy.  Now that they have new bosses in the federal government, the rules could change, but may not change for a few months, until after the November elections.

New Loan Product From Arrowhead Home Loans

Thomas Crate
Loan Consultant
Arrowhead Home Loans, Inc.
tom@arrowheadhomeloans.com
909.744.0455 Cell Phone

Do you want to buy a home with no down payment? 
Do you have some cash but do not wish to exhaust all of it to buy a home?   
How many times have you been pre-qualified only to realize that the mortgage insurance or higher interest rates keep you out of the price range needed to accommodate your family?   
Rural Development may be able to help!

No down payment and no cash reserve requirements help you qualify.

• Competitive 30 year fixed rates and no monthly mortgage insurance allows you affordable payments.
• Flexible credit and qualifying ratios can help open up new opportunities.
  Rural Development assists thousands of people annually to become homeowners.

For more information or to get pre-qualified, please call Arrowhead Home Loans at (909) 336-1793.

Fed Again Cuts Interest Rate

Thomas Crate, Mortgage Broker, Arrowhead Home Loans, Inc.  "The Mountains Trusted Mortgage Advisor."

For any and all mortgage related needs contact Thomas Crate at Arrowhead Home Loans, Inc.  909.744.0455

Economic Stimulus Package Passes the Senate

Tom Crate, Mortgage Consultant
Arrowhead Home Loans, Inc.
tom@arrowheadhomeloans.com
(909)  336-1793  Office
(909) 615-3987 Cell

With an 81 to 16 vote, the Senate passed an amended version of H.R. 5140, a $150 billion plan to jumpstart the economy with temporary tax breaks for consumers and businesses, extended benefits, and most importantly, two provisions designed to assist the housing market.

According to CNN, the House is expected to consider and pass the amended bill as early as tonight, which could put the bill on the President’s desk as early as Friday.

The bill temporarily increased the size of loans that may be purchased by Fannie Mae and Freddie Mac, raising the current level of $417,000 to reportedly up to $730,000 in the highest cost regions of the housing markets. The bill also increases the size of loans the Federal Housing Administration could insure.

Rest assured, Arrowhead Home Loans is following this story closely and is hard at work evaluating the resources you’ll need to make the most of this important legislation once it actually becomes law.

To your success,

Arrowhead Home Loans

Tom Crate, Mortgage Consultant
Arrowhead Home Loans, Inc.
tom@arrowheadhomeloans.com
(909)  336-1793  Office
(909) 615-3987 Cell

With an 81 to 16 vote, the Senate passed an amended version of H.R. 5140, a $150 billion plan to jumpstart the economy with temporary tax breaks for consumers and businesses, extended benefits, and most importantly, two provisions designed to assist the housing market.

According to CNN, the House is expected to consider and pass the amended bill as early as tonight, which could put the bill on the President’s desk as early as Friday.

The bill temporarily increased the size of loans that may be purchased by Fannie Mae and Freddie Mac, raising the current level of $417,000 to reportedly up to $730,000 in the highest cost regions of the housing markets. The bill also increases the size of loans the Federal Housing Administration could insure.

Rest assured, Arrowhead Home Loans is following this story closely and is hard at work evaluating the resources you’ll need to make the most of this important legislation once it actually becomes law.

To your success,

Arrowhead Home Loans

Tom Crate, Mortgage Consultant
Arrowhead Home Loans, Inc.
tom@arrowheadhomeloans.com
(909)  336-1793  Office
(909) 615-3987 Cell

With an 81 to 16 vote, the Senate passed an amended version of H.R. 5140, a $150 billion plan to jumpstart the economy with temporary tax breaks for consumers and businesses, extended benefits, and most importantly, two provisions designed to assist the housing market.

According to CNN, the House is expected to consider and pass the amended bill as early as tonight, which could put the bill on the President’s desk as early as Friday.

The bill temporarily increased the size of loans that may be purchased by Fannie Mae and Freddie Mac, raising the current level of $417,000 to reportedly up to $730,000 in the highest cost regions of the housing markets. The bill also increases the size of loans the Federal Housing Administration could insure.

Rest assured, Arrowhead Home Loans is following this story closely and is hard at work evaluating the resources you’ll need to make the most of this important legislation once it actually becomes law.

To your success,

Arrowhead Home Loans

Proposed Mortgage Changes Could Offer Big Boost

Tom Crate, Mortgage Consultant
Arrowhead Home Loans, Inc.
tom@arrowheadhomeloans.com
(909)  336-1793  Office
(909) 615-3987 Cell

A component of the governments proposed enconomic stimulus package announced Thursday would give an immediate lift to buyers and sellers in higher priced housing markets such as California. 

The package agreed upon by leaders in both parties in the house would allow government sponsored Fannie Mae and Freddie Mac to buy mortgages 50% more than the existing conforming limit of $417,000.  The Senate and the White House must also sign off on the proposal before it becomes effective.

The higher cap of $625,000 would likely breath life into the California market by making very affordable mortgage money available.  As of today, the current conforming rates are at 40 year lows.  Some individuals with higher "jumbo" or non-conforming loans would be able to refinance to take advantage of these historically low rates.  Home buyers would benefit as extremely affordable interest rate scenarios would be freed up by this move.

Steve Keefe, Owner/Broker of Coldwell Banker Sky Ridge Realty and Arrowhead Home Loans said late Thursday "In my nearly 20 years in the business, this is one of the most proactive things, I have seen government do to address real issues.  Moving forward with this provision and following it up with a permanent adjustment will benefit consumers and offer meaningful economic benefit."

Buyers and sellers looking to find out more about what his happening in the current mortgage market should contact the professionals at Arrowhead Home Loans, Inc. at 909-336-1793

Tom Crate, Mortgage Consultant
Arrowhead Home Loans, Inc.
tom@arrowheadhomeloans.com
(909)  336-1793  Office
(909) 615-3987 Cell

A component of the governments proposed enconomic stimulus package announced Thursday would give an immediate lift to buyers and sellers in higher priced housing markets such as California. 

The package agreed upon by leaders in both parties in the house would allow government sponsored Fannie Mae and Freddie Mac to buy mortgages 50% more than the existing conforming limit of $417,000.  The Senate and the White House must also sign off on the proposal before it becomes effective.

The higher cap of $625,000 would likely breath life into the California market by making very affordable mortgage money available.  As of today, the current conforming rates are at 40 year lows.  Some individuals with higher "jumbo" or non-conforming loans would be able to refinance to take advantage of these historically low rates.  Home buyers would benefit as extremely affordable interest rate scenarios would be freed up by this move.

Steve Keefe, Owner/Broker of Coldwell Banker Sky Ridge Realty and Arrowhead Home Loans said late Thursday "In my nearly 20 years in the business, this is one of the most proactive things, I have seen government do to address real issues.  Moving forward with this provision and following it up with a permanent adjustment will benefit consumers and offer meaningful economic benefit."

Buyers and sellers looking to find out more about what his happening in the current mortgage market should contact the professionals at Arrowhead Home Loans, Inc. at 909-336-1793

Mortgage Market Update 12/04/07

Marty Sievers, CMPS, Senior Loan Officer
Arrowhead Home Loans, Inc.
marty@arrowheadhomeloans.com

909-709-7318 

There are no economic reports scheduled for release today. Stocks are presently trading slightly lower, which normally might push some money over into Bonds - but for now, Bonds are relatively flat after pulling back from a long-term ceiling of resistance at multi-year highs.

Last night, San Francisco Fed President Janet Yellen stated she is seeing a larger than expected economic slowdown take place since the last Fed meeting. Yellen is the third Fed official in the past week to suggest additional interest rate cuts might be required, in order for the economy to avoid a recession. Although Yellen is not currently a voting Fed member, she is highly regarded and influential, so her words will carry some weight with the voting members. Another cut on December 11th looks likely - and as we've been saying, the biggest question is the size of that anticipated cut. This Friday's important Jobs Report will probably give some clues. If the Jobs Report meets or comes in below current expectations of 70,000, we may see a .50% cut by the Fed. And that would not likely be well received by the Bond market, as a Fed Rate cut will spur additional spending by businesses and consumers alike, therefore driving inflation into the economy.

Bonds are still riding the "Up Escalator" higher, which means over the long term, pricing may continue to improve. However, in the short term, yesterday's pullback from long-term ceilings of resistance at multi-year highs could lead to some further selling pressure on Bonds. Additionally, the Bond has also pulled away from the 25-day Moving Average of late, which makes prices vulnerable to the "Leash Effect", meaning that the Bond could be pulled lower back down towards the 25-day Moving Average ... just like a dog on a leash that has strayed too far from its owner. You can clearly see this by looking at the Bond Page with the 25-day Moving Average displayed. Once Bond prices drift away from the 25-day MA, it often gets reined back in by this "leash effect".

For all your Mortgage Related Needs, Please Contact me at Arrowhead Home Loans, Inc.

Marty Sievers

Information published by The Mortgage Market Guide