Deborah Romero The Mortgage Consultant

FHA to tighten up lending

2012-01-25T20:34:00.000-08:00

In an announcement today, FHA is going to update regulations to strengthen the financial outlook of the agency:
"These new regulations strengthen the process by which FHA requires certain lenders to indemnify the U.S. Department of Housing and Urban Development (HUD) for insurance claims paid on mortgages that are found not to meet the agency's guidelines. In addition, the final rule requires all lenders with the authority to insure mortgages on HUD’s behalf ("Lender Insurance" mortgagee) to meet stricter performance standards to gain and maintain their approval status..."
Further in the announcement the regulations discussed fraud, fraud detection, and having lenders be responsible for such fraud. I completely support that idea, but in the past 12 months FHA, Fannie Mae, and Freddie Mac have been able to find what they call fraud on a majority of the files that they own or insure.
I wonder if this is just a way to push unwanted debt onto the banks. If that is the case, the lending world just got a lot smaller.

Have You Called Yet?

2012-01-18T14:17:00.000-08:00

We are in the third full week of January. Have you talked yourself out of calling because you don't think you have what it takes to buy a home. Over a third of my clients are always so surprised when they find out that their credit is much better than they thought, and they actually not only qualify, but qualify for more than they thought possible. Don't let another year slip away, call me today, and let's see if you can be in your own home in 2012.

How Do I Save for a Down Payment?

2012-01-13T07:22:00.000-08:00

You have made the choice that in 2012 you are going to join the ranks of Home Owners. You are on the right track, but you want to have more money saved, both for the purchase, but also to have money left over for those "just in case" moments. You also want to make sure you can handle the new payment on your home. How do you get there? Sometimes it is easier than others to save. Tax time is coming and if you are going to get money back from the government, that is a great way to kick off your savings account. But what other ways can you save money. As an example if the price bracket you are looking in has an example payment of $1200 per month, but currently you are only paying $900 in rent. I would recommend taking $300 each month and putting it into a savings account. If you can do this and not have to touch that money for at least 6 months, then that new payment will not be a problem for you. You have been making the new payment for six months and you $1800 in savings. Also, the lender can see that even though your rent is only $900, that in fact you have been saving the equivalent of your payment, a great compensating factor for qualification.
Another great way to save is what Oprah calls the "Latte Factor." Do you go to Starbucks everyday? Maybe you aren't a Starbucks person, but there is something you spend money on everyday or several times per week that if you cut down or cut out, you could be saving. Write down everything, and I do mean everything, you spend money on every day for a week. Then see what you can do to stop spending the extras. Are you going out to eat a lot, at lunch or dinner. Think about bringing your lunch to work or cooking at home more often. Both of these options will benefit you more than just in the pocket book. Eating food you prepare at home is not only less expensive it is healthier. You may be able to achieve two Resolutions with one step. For more ideas email or call me. Let's get you on the road to home ownership in 2012.

Detour-Tax Time Tips

2012-01-11T12:11:00.000-08:00

In the past few weeks we have seen more and more tax returns that either have errors on them or that what was filed was not the copy given to the client. When having your taxes done, make sure that what is filed with the IRS is the copy you get from your tax preparer. Also, as you sign your taxes, go through them. Make sure your address is correct, that deductions taken are accurate. Once you sign them, you are telling the IRS that they are right.
Also, some times family, friends, or preparers will give us ideas for write-offs that will help us this year, but could effect us in future years. A great example is when you live with a family member and help pay the mortgage. If you take any part of the interest write off on your taxes, then you will not qualify for any first time home-buyer assistance that may be available for the next three years.
Another example is when you take large 2106 expense deductions. 2106 deductions automatically reduce your income when trying to qualify for a mortgage. If you write-off $6000 per year that is $500 per month we have to reduce your income by. That could make or break a purchase transaction.
I hope these tips are helpful, please feel free to email or call me if you have any comments or questions.

Step Four

2012-01-10T07:10:00.000-08:00

It's now time to take the next step. You are confident that your credit is good "enough", your income is stable, and you have been saving a little at a time and have a modest nest egg. You may need help from one of the down payment assistance programs, family or the seller, but you don't want to wait any longer with where rates and housing prices are.
Pick up the phone and call! Preferably, call me! 209-825-9383 or email: dromero@abilitymortgage.com.
You will not know your next step until you talk to a professional. For my clients, this is a free consultation. It can be done over the phone, in person, or online at our website: http://www.abilitymortgage.com/. It takes about 10 minutes for the application process. Don't worry about account numbers or that you won't have everything you need. This is what you will need for the initial application:
Name, Social Security Number, Date of Birth, Address, and Last pay stub or W-2. That's it and I bet most of that information is in your head. If you are calling and applying with a spouse or co-signor, then the W-2 will be helpful because it will have that person's social security number on it.
Stop waiting, start 2012 off right and call!

Step Three: How much is a down payment?

2012-01-09T12:05:00.001-08:00

When purchasing a home you will need to have some money for a down payment. There are all types of loans even 0% down, but no matter which loan, you will need to have assets in the bank or someone able to give you assets to purchase your home. When making an offer on a home the seller will want a good faith deposit. This is money that you give to the escrow company to be held until the property is ready to be transferred to you at sale. The seller wants to know you are serious and can ask for as little as .5% to 10%. Most commonly we see a minimum of $1000. That $1000 will be credited to you and will reduce the amount of money you need for your down payment and/or closing costs.
Typically if you do not receive or qualify for 0% down or any second mortgage or grant programs and you are a first time home buyer, you will need 3.5% of the purchase price plus closing costs to purchase your home. If you are purchasing a home for $150,000 you will need $5,250. This can be in your bank account, your 401k or retirement account, or can be gifted to you by an immediate family member. But that is not all you will need, there are the fees to pay the bank/lender, the title/escrow company, the notary, appraiser, pest inspector, etc...also, you will need to set up your impound account, the account that holds the funds to pay your taxes and insurance when due. These costs can reach 4-4.5% of the sales price (depending on time of year and current rates). That could be an additioanl $6750. Now, you can ask the seller to help you with closing costs, but there is no law stating that they have to.
Don't let these figures scare you, there are programs and loans available to help, but if you can start saving some of the money today, getting your loan in the future will be much easier. Contact me for more information and to get onto the road of home ownerhsip

Step Two-Employment and Income

2012-01-05T11:54:00.001-08:00

If you have had your credit pulled, or you know that your credit is good (over a 660 middle score from a mortgage source), then it is time to consider your employment and income. Investor's are looking for job stability. That doesn't necessarily mean you have had to be at the same company for the last 10 years, but they do want to make sure that if there has been any changes in the past two years that it was for good reason. If you just went from being a warehouseman to a car salesman, you will probably need two years of history before they will consider your income. But each case is different and you should talk to your lender about it. In the new conservative world we live in, it is best to take a two year average of your income. Now if that income includes Bonus or Overtime a written verification of income from your employer will need to be requested by your lender. The reason is that the overtime and bonus income has to be verified as usual and customary. A one time bonus or a season of overtime (that does not happen every year)will not be used to help you qualify.
Stay tuned for more "how to" information.

Step One

2011-12-30T10:24:00.001-08:00

To kick off 2012 I would like to help more people attain their goal/dream of home ownership. The first step you should take is finding out what your credit looks like. Credit plays a huge role in the approval process. Not only can bad credit keep you from purchasing, but simple issues like disputing accounts can cause delays. Also, credit scores that used to seem perfect are now not considered as "perfect." Scores as high as 740 can still pay adjustments in their rate or fees to the investors.
There is so much to find out, that you should be talking to a reliable lender months before you consider shopping for your first, next, investment or second home. Getting a full picture can help make the loan process much easier.
Feel free to contact me through my website or via comment on my blog about finding out more about your credit.

Time for New Resolutions!

2011-12-29T15:37:00.000-08:00

I believe I am going to take a new turn with my blog. Instead of just posting opinions and ideas about the mortgage industry, I am going to make it an online educational course. For those of you who are looking to purchase your first home, move into a bigger home, downsize into something smaller, invest in real estate, or buy that second home you have always wanted, I am going to put the how to on this website. If you want to know about a particular topic, comment or email me. I will address it in my next blog.
This will be the blog for the do it yourself, Internet savvy, real estate driven person. I hope that my knowledge will help you grow and achieve your dreams.

Tomorrow's Blog: Where Do I Begin?

Labor Market Issues

2011-12-02T12:56:00.000-08:00

The bond market is the benefactor of two items today. First is the Labor Market is showing signs of some issues. Numbers came out good, but are they believable? Time will tell. Also, the Fed is buying more bonds today than it had originally projected. Rates are good, maybe getting a tad better. What a great time to buy or refinance your home.

The Countdown Begins

2011-11-29T12:22:00.001-08:00

There are 27 days until Christmas, which means 26 shopping days and dieting days... My calendar doesn't seem full yet, but I have this sneaking suspicion that it is going to get full and fast.
I spent the last holiday weekend with family, both sides, and friends. It was a good time, but missed those who could not be there. I spent the day after shopping for those who are less fortunate and enjoyed myself immensely. I got to spend a lot of time with my daughter and got to see how much she is truly like me. Poor dear! Friday, Saturday and Sunday hosted a total of 5 baseball games at BLD. The boys did well, and it was a great time.
I am now off to make more lists and get things done, so that my home feels the holiday spirit that I have in me.
On a work note, bonds are still doing well as are Stocks, I would love this world of positive in both markets to stay, we'll see how long it lasts.

GDP revised lower

2011-11-22T13:33:00.000-08:00

The GDP was revised lower today and the bond market has held strong on that news, as it was not great information for bonds. The market is up 19 basis points today and is still trading between a strong layer of support and resistance. Tomorrow we will have a lot of economic data thrown at us as the market is closed Thursday and is on a shortened trading day Friday. Rates are amazing and taking advantage of these rates at any time would be a great idea. Call me if you would like to discuss your options.

Global Economy, and Understatement

2011-11-14T12:02:00.000-08:00

It is an understatement to say that we are a global economy any more. When worries in one part of the world can send the rest of the world's economies realing. Europe is facing their worst economic times since WWII. This statement in and of itself shakes the foundation of all economies. The stock and bond markets are playing on the teeter totter today, and it appears with all of the unrest in the world, they will keep playing.
The Federal government is still purchasing MBS, but the effect has been tempered by the volatility of the global markets. Does this mean that you shouldn't move forward with your purchase or refinance, or does it mean you should hurry up...it means neither, it just shows that we are in an interest rate market that has never been seen before, and if you are ready jump in, the market is what it is.

The Effect a European Leader has on our market

2011-11-08T12:28:00.000-08:00

The Bond market started the day to the upside and just recently has lost traction and is in negative territory. Why??? News (rumors) out of Italy today that their prime minister is going to resign has our Stock Market doing the Jig. It appears that the Stock Market views this move as proactive and in the right direction to stave off the volatility that could be coming in their capital markets.
For those of you in contract to purchase a home, lock today, who knows how long this slide will last and the rate you can get today is terrific. For those of you refinancing, just depends on when you really want to close. Sooner rather than later? Then lock, stop the stress and take advantage of what the market has given you. For those of you waiting to see 3%, keep waiting, but my crystal ball is not sure if we will ever see that 30 year rate come to light.

2011-11-07T09:07:00.000-08:00

The MBS market started the day down, but has since recovered and is not in positive territory. The stock market is down just a few points and with the upcoming Treasury auction everything could change. We see it everyday it seems like.
Greece's Prime Minister has resigned, it appears the market likes the news and that the new regime will most likely take the EU deal and try to restructure. But just when we thought we could breathe, new out of Italy... The Italian economy could be in trouble, an invitation to the Italian Prime Minister has been heard. This again could rock the EU and the global economy.
We never know what tomorrow will bring (or the next hour even). If you are looking to refinance or purchase and are ready to lock, don't hesitate, waiting may save you and 1/8, but it could cost you a 1/2. Is it worth the stress? Lock now and sleep peacefully tonight.

New Jobs Chart

2011-11-04T10:25:00.000-07:00

Click Here for My Featured Chart

You Gotta Know When to Hold'em...Know When to Fold'em

2011-11-03T07:53:00.000-07:00

The Equity markets will have a roller coaster of a day, boy doesn't that sound familiar. Our own economic issues aside, we are a global economy, and choices being made in the European Union, China, Japan, etc...have effects that are wide reaching. The referendum vote that PM of Greece had wanted may or may not happen. If the Greek people vote down the plan or vote to remove themselves from the EU, The EU will not give any assistance, "not one penny," to help Greece in the coming months of economic uncertainty. Who will? Will anyone? Is someone going to finally say, you made your bed, now lie in it? Only time will tell on this front.
But what does that make for the Wall Street investor, or the main street investor, or the first time home buyer trying to figure out what is best for their future with the mortgage they are choosing. Here is my advise, at least to the soon to be home owner. Rates are terrific now. Instead of waiting a day, week or month or two, take advantage of what the market is currently handing to you. The purchase transaction will be a lot less stressful, if you lock in your rate and know that it is a terrific rate, a rate that wasn't available 1 year ago, 5 years ago...ever.
Just like today, tomorrow will be volatile and another/different roller coaster. Take control and step off the coaster!

Could there be a QE3?

2011-11-02T06:47:00.000-07:00

The MBS market has had three great days on the market gaining over 100 points. This morning it opened weaker, but since has started to pare some of its losses. The stock market has taken a beating as of late and is holding onto a modest gain right now. The Fed speaks today about the economy and its thoughts on where it is headed and what they should do about it. The rumor mill is all a buzz saying we could see a QE3. I am not sure that is a great answer, I feel that my none of my decedents, no matter how many greats you put in front of their names will be able to get out of the hole we are digging right now.
My concern is not only the hole we are digging, but I believe Greece is the tip of the iceberg in Europe and who is going to be able to save us all? China is on hold...they can't be the white knight for everyone.
There is a silver lining, home prices and mortgage rates are significantly lower than we have ever seen. Those who are working and are able to pay rent everyday, should really look at the idea of purchasing a home. There are loans available with little to no down payment if you fit the guidelines. A home is an amazing investment and for those who have the dream of one day owning their own home, now is the time to try and make that dream a reality.
If your credit isn't perfect, don't let that stop you, talk to a professional (like me) to find out what you need to do, and get yourself on the right track. Procrastinating just makes everything worse. (A friend of mine told a group that yesterday, and she was so right!)
I'll keep you posted on the QE3 announcement...

Updated HARP Plan

2011-10-28T11:28:00.000-07:00

The federal government has made the announcement as of 10/24/2011 that the HARP program is going to have changes made and that may make it more accessible for home owner's who are current on their home, but maybe upside down. However this is the quote from the Press Release on when we will have the actual guidelines:

"The Enterprises (Fannie and Freddie) plan to issue guidance with operational details about the HARP changes to mortgage lenders and servicers by November 15. Since industry participation in HARP is not mandatory, implementation schedules will vary as individual lenders, mortgage insurers and other market participants modify their processes."

I promise to all of my current and hopefully future clients, as soon as we have the guidelines and are able to implement them, I will be working on them. Please be patient as we wait for the guidelines and shoot me an email or comment if you would like me to look at your personal situation in the coming weeks. dromero@abilitymortgage.com

Have a Great Weekend!

The Updated HARP Plan

2011-10-26T07:05:00.000-07:00

I love to be cynical, but I think the government may have fixed the problems we were having with the refinance program. If what I am reading is true, if your mortgage is owned by Fannie or Freddie and you have been current with that mortgage, you may be able to refinance into a lower rate.

When the original program was rolled out they were hoping to help 5 million families. Values being what they are and other issues, less than 900,000 mortgages were able to be re-written.

I hope this program is what it appears to be and that we can help families lower their payments, rates, and stay in their homes. It won't solve the problem for everyone, but it may be much more successful now.

Mid-Term Week Off

2011-10-17T13:03:00.000-07:00

The kids have a week off here in October. Of course I am very busy, but Frank and I have decided to make a softball trip into a mini vacation. We will be taking both kids to view 3 colleges, see a few different beaches, and hopefully relax a little before we have another weekend of softball games.
If you have a break this week, I hope you are able to find some time to do something "fun" with your child. Any great ideas, please let me know via comment.
Have a great week!

How Clear is your Crystal Ball?

2011-10-14T10:09:00.000-07:00

I have had several meetings with clients asking my opinion of where I think the market is going. It is difficult to say. We are currently in a range with Mortgage Backed Securities (MBS) that we haven't been able to sustain before. Rates are in the 4% range for a fixed loan, to me that is absolutely amazing. However, will those same rates go down to 3%? I cannot tell you. I can look at the stock markets, bond markets, commodities, gold, oil...I can watch as the European Union comes up with monetary policy and corrections to help with a Greek Bailout. But what I cannot tell you is how each move each of these different markets/countries will effect our 30 year fixed interest rate. Some days it will go up, some days it will go down.
What I can tell you, is that where rates are currently residing, whether they go up a little or down a little, they are still amazing! 4% even 5% to secure the financing you your primary residence for 30 years it unbelievable. Do not put off today what you may lose tomorrow. If you are thinking of refinancing and qualify, go for it, the difference .25% makes on you payment is less than $20 and what if by waiting...it never comes and rates continue to deteriorate instead of improve. If you have considered purchasing but haven't taken the time to get yourself approved or to find out what you need to do to get approved...it is time.
Take charge of your future and take advantage of what maybe an unprecedented time in history.

What happened to Mid-June?

2011-10-04T13:32:00.001-07:00

I have been Facebooking, Linking In, and Twittering so much, that I forgot about blogging. Well, it is the beginning of the fourth quarter. I am doing well and have started volunteering my time again to causes that I think are important. Life is hectic, work, family, school, and volunteering. In May I thought interest rates were phenomenal, and they have continued to improve. We are now at 4% on a 30 year fixed and who knows if this is the bottom. But whether or not it is a great time to purchase and/or refinance. I hope that if you want to be a homeowner or are one, that you have had someone look at your personal situation and give you an honest assessment of how you can take advantage of this amazing market. If not, call me, I would love to help.

Mid June???

2011-06-17T12:47:00.001-07:00

I cannot believe we are already half way through 2011. How do we put the brakes on the year? I just planted my garden, I guess I will have veggies in the fall and not the summer, if they produce at all.
The mortgage market is holding strong and I cannot believe rates are still under 5%. I do not know how much longer rates can stay this low, but if you are in the market to purchase or have the equity to refinance, now is the perfect time.
Call me if you have any questions.

Baseball/Softball Season

2011-04-13T12:00:00.000-07:00

Completely off the topic of loans today. I love baseball/softball season. I love watching the kids grow and improve. I enjoy watching the competitiveness between rival schools and then the camaraderie after the game. I also love that in one aspect of our lives there is still competition and that it welcomed. In so many facets of our children's lives our society has made competing an ugly word. The world is all about competition, growing from it, learning from it and becoming better because of it. I hope our children know that when the get into the real world, they will have to compete for everything.

Still Here!

2011-04-11T15:12:00.001-07:00

Just in case anyone was worried, I am still in the lending business. The government did not scare me away and I am still helping clients purchase homes with Ability Mortgage. Though after a rough few weeks, I needed some motivation. If you receive my e-magazine you may have seen this, but if you ever just needed a little motivation this is a great 2 minutes! http://www.allaboutnews.com/vc.php?a=y&b=67&i=448&rs=106459225eadf03202fc924

April 1, 2011-Will this be the end?

2011-03-31T13:59:00.001-07:00

Tomorrow marks the beginning of compensation reform. I am one of those originators who has decided to embrace the change and not dwell on it. But I am wondering will this be the end of reform in the lending arena? Will the federal government, state, other licensing agencies go after another group of people, or is there more to be done to the originators who are still trying to make a living. I have taken tests, classes, continue to do Continuing education for both of the licenses I have. I disclose in multiple ways, multiple different subjects to home buyers. Sometimes I think all my disclosing confuses more than helps. But is all of this enough, or will there be more to be done to the loan origination side of the Real Estate market. Only time will tell.

March 9, 2011

2011-03-09T11:48:00.001-08:00

It is almost mid-March. Time is flying. First quarter is almost complete, new laws are up and running, and newer laws are preparing to be put to use. Much will change, but as we have seen over the past two years, the more things change, the more they stay the same. Every new legislation has made lending more difficult, but we are still lending. All the new guidelines make lending a challenge, but we are still lending. The cost of making loans or getting a loan has gone up, but we are still lending and people are still borrowing. Those of us not here to make a quick buck, but to earn a living and to take care of our communities will still be here when lending is no longer under the microscope.

Home Buyer Class

2011-02-28T12:48:00.000-08:00

I am hosting a Home Buyer Class tomorrow 3/1/2011 in the McFall Room of the Manteca Public Library. The class starts at 7:00am and lasts about an hour. This is a no obligation event. I am in the business of educating those people who are interested in the American Dream. Whether you are a first time home buyer, move up buyer or an investor I will have information for you. The guidelines for loans have changed so significantly, come and find out how they will affect you. Hope to see you there!

Credit Repair Class- 7-8pm February 22, 2011

2011-02-22T14:13:00.000-08:00

I will be hosting a Credit Repair Information Class tonight from 7-8pm at the McFall Room of the Manteca Public Library. This class is to educate future home owner's on what type of credit profile they will need to qualify for a mortgage in today's lending world. This class is great for first time home buyers, or previous home owners. For people with good or not so good credit. If you or someone you know has had a bankruptcy or a foreclosure and want to know the guidelines on how long it will be until you can purchase a home, this is the class for you. I hope to see you there!

Homes & Money Newsletter (1st Quarter 2011) (11x17)

2011-02-18T13:08:00.000-08:00

Homes & Money Newsletter (1st Quarter 2011) (11x17)

Home Buyer Class Tonight

2011-02-01T14:52:00.000-08:00

I am putting the final touches on my presentation for tonight. Hope you will join me at the McFall room of the Manteca public library from 7-8pm. Good Information to help you prepare to purchase your home!

Home Buyer Class

2011-01-28T09:54:00.000-08:00

I will be hosting a Home Buyer class on 2/1/11 from 7-8pm at the McFall Room of the Manteca Public Library. Are you a first time home buyer who needs to understand the process. Do you want to increase or decrease the size of your home, but not sure in this market, if you will be able to. Are you considering purchasing a 2nd home or an investment. Come and get answers to your questions. Hope to see you there!

Credit Informational Meeting

2011-01-26T11:08:00.001-08:00

I hosted my first credit information meeting last night. It went very well. I am excited to be able to educate people on how to better their credit standing to be able to become a homeowner in the future. My next class is a Home buyer class that I will hold on February 1, 2011 at the McFall room of the Manteca Library. The credit class will be back next month also on February 22. I hope to see you there!

Obama Care 101

2011-01-18T15:51:00.000-08:00

I have often wondered how with our national debt in the trillion figures, the government was going to pay for Medical for all program. Supposedly no new taxes on our income, or at the pump, or....wherever you would look. Come to find out there is. On 1/1/2013 a tax on the sale of homes will go into effect. a 3.8% sale tax. If you sell your home for $200k (very viable for the San Joaquin Valley, $7600 will go in a sales tax. Check out the blog post at GOP.gov http://www.gop.gov/blog/10/04/08/obamacare-flatlines-obamacare-taxes-home . As Americans it is time we start taking care of ourselves. We should not pay taxes just to care for those who choose not to take care of themselves.
I have no issue helping with children, but able bodied men and women, need to be utilizing their able bodies, even if the job is hard. Tell people about this tax...also, why is it that this tax takes effect after the 2012 election? Probably because if it took effect 1/1/2012, the democrats would have no one left in office.

Pearl Harbor Day

2010-12-07T13:47:00.001-08:00

December 7th isn't a day that we celebrate, but it is a day that will live in our history. When Pearl Harbor was bombed on that Sunday morning by the Japanese it marked a turning point in the war, but also a turning point in the minds of Americans. We were no longer able to sit back, an attack had occurred on our soil and something had to be done about it. In my family's recent trip to Oahu we went to Pearl Harbor and visited the Missouri and gazed upon the Arizona Memorial. The sight is truly humbling as the lives that were lost are counted. To hear the stories and wonder what life on the islands must have been like at that time. To imagine what that day meant to the soon to be written history that is World War II. Take a minute of your time today to remember those soldiers and their families. Be thankful for what you have and what has been given to protect it.

It's December 6th...Already

2010-12-06T14:23:00.000-08:00

Where is the time going? Not only is it time to decorate for the holidays again, but it is time to start setting our goals for 2011. I always seem to think that next week, next month, next...my life will calm down then. I guess it is time to realize if you are living, then your life is not calming down anytime soon and it is time to just embrace it. Time flies by, but as long as we make the most of it, it will be worth it! Have a great day!

Inflation Worries

2010-11-12T13:32:00.000-08:00

Even with the Fed verbalizing their QE2 decisions, China's inflation numbers have wreaked havoc on the bond market today. The bond market has lost ground 5 of the last 6 days. It also appears that this may be the trend as we finish out 2010. Interest rates have been so low for so long that just like the California housing market, they too may have to "pop." I don't think we will see interest rates rise to double digits in the next 30 days, but I do think we will watch as the Mortgage Backed Securities market starts an uphill drive.
This should not scare away potential buyers or potential refinancers, but it should open your eyes that now is the best time to achieve rates of a lifetime.

Monopoly

2010-10-06T11:51:00.000-07:00

In my education, at a Junior College, State School and later Private University; something I learned in every business class I took was that competition is good. It is good for the consumer, good for the provider and is a desirable condition to have. Our government has worked diligently in past years to make sure companies like Microsoft didn't have a monopoly in the IT market. Why is it then, our government has backed every bill that will give the FOUR big banks a monopoly on mortgage lending. They helped to bail these companies out, or encouraged mergers or acquisitions and then made the rules different for banks versus brokers. Brokers are competition and with the new legislation, brokers are almost completely forced out of the market. Funny how the banks all backed that legislation. You can check out this link:
Big Banks Slashing Retail LO Compensation - 10.06.10 Real Estate News for Real Estate and Mortgage Professionals http://t.co/X5n18R0
from Think Big Work Small and see what others in this industry are saying.

Back in the Saddle again....Mortgage Insurance explained as an interest rate.

2010-10-05T14:17:00.000-07:00

Here I am, blogging once again. But I do have loan news to share today. As of yesterday, 10/4/10, the new FHA upfront and monthly mortgage insurance premiums have been changed for any case numbers pulled on or after 10/4/10. Just looking at the numbers doesn't mean much, but seeing them as a percentage rate makes them more understandable. For a client who would like to purchase a home today they will end up paying approximately .375% higher for their loan than those whose case numbers were issued prior to Monday. Now of course it won't be in your interest rate, but that is what the new premiums do to the payments. I understand that FHA has taken losses over the past few years and that our industry is still reeling, but when interest rates start moving up, buyers will have less and less ability to purchase. Also, this new increase hinders current FHA borrowers to take advantage of these amazingly low rates, because the savings is negated in the almost double mortgage insurance. I hope this move does what the government thinks it will do.

October Already!

2010-10-04T11:32:00.001-07:00

I desperately want to be a good blogger. But I have never been good at keeping a journal or a diary. So much changes daily in our lives; work, family, friends. We have this great new world of media that allows us to touch base, but do we have the social interaction that we really need? I wonder if in the years and generations to come we will see a bigger split from family and friends? Do we really know one another? How easy is it to be whomever you want on this great wide web that we post to? You can tweet, facebook, blog, etc...whatever you want, but can you hold a conversation. I wonder where it will all lead...

It's Not Too Late!

2010-05-06T14:23:00.000-07:00

The interest rate market has been on a roller coaster in the last month. When the American Government stopped purchasing mortgage backed securities on March 31 the market went into massive volatility. Today the stock market joined the roller coaster ride as it has seen losses up to 1000 points ending the day down only 347 points. These types of turns prove just how important the "global market" truly is. The issues facing Greece are causing volatility around the world.
The good news for those of you looking to purchase a home, rates improved today, significantly. Call or email me for more information.

Loan Modification Scams

2010-04-29T15:11:00.000-07:00

Loan Modification is a word that is thrown around quite liberally these days. In essence, a loan modification is a changing of the original terms of a mortgage note that; may or may not be permanent, may or may not negatively impact your credit, and that may or may not directly reduce the principle amount due on the note.
Everyone should be very wary of companies in the market place looking to "scam" current home owner's who are desperate to keep their home. You should look at the following website, which FHA, HUD, FANNIE MAE and FREDDIE MAC all support: http://www.loanscamalert.org/ .
Most loan modifications can be done by the consumer themselves, if they just have patience. It is a long, arduous process, but in the long run can be very beneficial for the homeowner.
HUD has Loan Counselors to help answer questions you may have and talking to your current mortgage holder is always good idea.

Things are a Changing!

2010-04-26T11:55:00.001-07:00

Ability Mortgage has undergone some major changes in the last few weeks. The most important change is that we are now a direct lender. We have made this change to be more competitive for our clients. In the ever changing environment that mortgages are in, new laws make it harder and harder to close a file in a timely manner. This is just one step we have taken to keep ourselves competitive.
We are very excited about the change and even though we are learning a new system, we can already see the difference it is making for our clients. Feel free to give me a call or shoot me an email if you have any questions about our newest endeavor.

Also remember: to qualify for the $8k tax credit you must me in contract by Friday April 30, 2010.

Change is in the air!

2010-01-22T10:42:00.001-08:00

2010 will continue adding changes to the lending environment. There are new RESPA guidelines that need to be followed, specifically the 2010 Good Faith Estimate. Even though the government had the best intentions, I don't know if they consulted anyone who actually conducts business in the mortgage field. The new Good Faith puts restrictions on the buyer that I don't believe were the intentions of the government. It also gives the buyer a lot less information than they should have. It has some promise, but there are changes to be made. And the one thing I am sure about in our industry is that we can handle change.

Merry Christmas!

2009-12-24T10:17:00.000-08:00

The time is here, I would say finally here, but it just sneaks up on me so quick lately. The house is decorated, the stores are full, and I am trying to tie up any lose ends before we close for the three day weekend. I hope you and your family have a terrific Holiday weekend!

Where are Rates Headed?

2009-12-14T12:59:00.000-08:00

Interest rates have been at all time lows for the past 12 months. Even though my crystal ball is a little cloudy right now, my educated opinion is that rates are going to start moving in a higher direction. This is not going to be an overnight spike up, but we are going to see a steady rise until all of the stimulus that the government is propping up this industry with goes away. I would say by July 1, 2010, rates will have moved significantly. Don't delay, if you need to lower your current rate and have equity, now is the time. If you want to purchase but think rates will stay this low forever, don't be mistaken. Move now and take advantage of what your government has done for you.

To refinance or not to refinance

2009-11-18T09:14:00.000-08:00

Rates are at all time lows. They have been lower than we ever thought possible for an extended time. But just because rates are low, does that mean it makes sense to refinance?
Every home owner's situation is different. Just because you can save 1% on your interest rate, doesn't necessarily mean the refinance makes sense. You have to look at the big picture. What is the cost of the refinance, how much time are you adding on to your mortgage, etc. If the mortgage professional you are working with doesn't look at the "big picture" maybe they are just in the transaction for the paycheck, and not for the lifetime client.
It is my belief that not making money today because I am honest about a client's financial position, will benefit much more down the road than it does if I push a product for my financial gain. Clients should always come first, and you should treat them how you want to be treated.
This is one of my business philosophies.

Rates will move, they are going to go up!

2009-11-17T11:54:00.000-08:00

If you or a family member are considering purchasing, but you are waiting for rates to get to 4%, you are going to be disappointed. Interest rates will start a climb to the higher, and it will start soon. Don't miss out on the most amazing rates we have ever seen, because you think you may get .125% less. Is it worth it, if the rate goes up? A purchase changes if the rate goes from the current 5% to 5.5% which we believe to be right around the corner.
Jump off the fence, the real estate mortgage is now the perfect storm for buyers.

What do we really need?

2009-11-12T12:39:00.001-08:00

I always want to be informative when I write on this blog, but sometimes I am just stumped. There is news out today that FHA may be in financial troubles, they do will (may, don't) have the required reserves that the government imposes. This can and may well be a huge problem in the coming months. Some of the insiders believe it will push FHA to requiring a 5% down payment instead of the current 3.5%. There are arguments on both sides of this issue right now. Some say, if you up the down payment requirement, less people will own, others say that if they can't put 5% into the purchase of their home, should someone really be buying? I am not sure where I sit in this debate. I understand both sides. I also realize that Americans are burdened with debt, because of the images we are sold. Rarely are we happy with what we have, we always want more. Credit in general is very easy to get and that just makes getting what we want that much easier, even if it takes us ten years to pay it back.
I think Americans need a new perspective on the "American Dream." We need to re-evaluate our lives and really see what is important. It will be different for all of us, but I am sure all of us could figure out "things" we could live without.

November 9, 2009

2009-11-09T10:03:00.001-08:00

Time just seems to disappear right from underneath us. I cannot believe we have 2 1/2 weeks until Thanksgiving and then Christmas...my son said last night, mom I only have 2 months until I am eleven. I told him he was crazy..then I counted. He was right. It seems that we all live by schedules and due dates and before you know it the days, weeks, months and years have gone by. I think I better get going today, so that I don't miss another minute.

Hooray First Time Homebuyers!!!

2009-11-06T12:21:00.000-08:00

The government in their infinite wisdom has extended the first time home buyer credit to June 30, 2010. They added a little more with a $6500 credit to current home buyers who purchase. There are restrictions, but more incentives for buyers. Hopefully that will help keep our real estate market from going down any further.

Not just yet...

2009-11-03T13:43:00.000-08:00

Though there is much talk about extending the first time buyer credit, nothing has been ironed out or agreed upon yet. So, that being said, you must close by 11/30/09 to qualify. Also remember, that the county recorder's office (at least in San Joaquin County) will be closed the day after Thanksgiving. Monday the 30th will be a crazy day. Try and get your purchases done by the 25th, to have a happy and stress free end of the month.

A Very Blustery Day!

2009-10-27T13:03:00.000-07:00

The weather in the valley has shifted gears, and I wonder if mortgage backed securities are taking their cue from the weather as they have blown upwards and are having a great day. We needed this day, but we will need to be careful this week as any news could change the upwind to a down wind very quickly.
The senate is debating the positives and negatives of extending the first time home buyers credit. We will see if they make any decisions tonight. All markets are waiting for this tid-bit of juicy news.
Stay tuned for more information.

Rates: They are a Climbing

2009-10-26T10:09:00.001-07:00

We may have seen the best of the best when it comes to mortgage rates. As the fed slowly turns off the life support, and the market starts standing on its own two feet again, it is likely that rates will do what is expected, and that is climb. For every action there is a reaction and the market has been artificially stopped from reacting to the real news and real data.
Banks are limiting the numbers of homes on the market to try and inflate values, the government is slowing then stopping their purchases, inflation is going to hit and when it does, rates have to move up.
I had a client tell me that his first home in the 1980's had a rate of 16%. It makes 6 and 7% seem tame doesn't it?

Earnings Reports

2009-10-16T09:28:00.000-07:00

The stock market rallied this week on relatively good news from earnings from many sectors. Then Bank of America had their conference call and report. They lost $1 billion last quarter. The stock market did not like that news. I will take it for right now as that will buoy bonds today. We have seen profit taking the last few days in the bond market and that means higher interest rates for borrowers.
Advise for buyers or potential buyers on the fence, jump off!!! Rates will not stay at the 5-5.25% range forever. We have been here much longer than anticipated. I know getting a contract on a house right now is difficult, but perseverance and patience will ultimately pay off. Don't get out of the market, cast a wider net.

Dow Jones hits 10,000

2009-10-14T13:09:00.000-07:00

It was a milestone day, as it has been a year since we saw the 10,000 mark. Better this time as we are on our way up and not on our way to 6500 like last year. It is a momentous occasion. The Mortgage Backed Securities market is trading lower, as the Fed notes did not give any good news and with the stock market up, there is money flowing out of bonds and into stocks. It feels almost like a normal market.
I hope that the Stock Market rally continues as there are so many people who will be relying on those funds for retirement in the near future.

35 Day Escrows~A compromise we can live with

2009-10-12T12:30:00.000-07:00

In today's limited inventory housing market, having a close of escrow date in the not so distant future always makes a seller (whether a bank or an owner) feel better. But with the changing mortgage market and the disclosures and waiting periods being put into place by the government, accepting a contract with a 35 day escrow may save everyone multiple headaches. The new HERA/MDIA laws require a 4 day disclosure period before an appraisal can be ordered/paid for. If a buyer's agent writes a contract with a 35 day close of escrow, the first four days of the waiting period are no longer a detriment to closing on time. Agents make sure that you write the time frame to begin upon buyer's lender's receipt of fully executed written contract. Everyone is protected, and the 35 days should be a close date that everyone should be able to meet.

Happy Friday!

2009-10-09T12:20:00.000-07:00

Mortgage Bonds had a great week and are now giving back some of the gains. That means that the amazing 5% rates we saw on Wednesday are starting to disappear. Now is a great time to purchase a home if you have been considering it. It is also a great time to refinance a FHA loan before the streamline refinance's rules change on Nov. 18. This is how you can take part in the stimulus package if you don't qualify for the other incentives out there. Lock your loan into a low fixed rate and save money, it is a great time to do it all!

$8000 Tax Credit

2009-10-07T12:24:00.000-07:00

As of this very minute, the $8,000 tax credit for first time homebuyers expires Nov. 30, 2009. You have to close escrow and have your deed recorded by the 30th, to qualify for this credit. There is talk about extending it, but as of right now, that is not the case. If you are counting on these funds, make sure you are in contract by 10/25/09.

October Already

2009-10-05T13:32:00.000-07:00

Really, where does the time go? I have been trying to stay in touch with my social media, but it is amazing how much there is out there; my blog, twitter, facebook, active rain, etc...I get lost in staying in touch. New month, another new commitment to myself and my business.

A New Month

2009-09-01T11:15:00.000-07:00

August was a month of mixed emotions. As new laws change our daily lives at work, our kids return to school, and life keeps rolling by, the little tasks that you promise yourself you are going to do fall by the wayside as more important and pressing matters pop up. I am rededicating myself today to make sure I stay on top of my blog. My goal, and please help me stick to it, will be 3 times per week. So at the end of September, we will see how I have done.
In mortgage news, the bond market has had a neutral to positive day. I will take that any day of the week. Some of the economic news that came in today was very positive, but when we have been down for so long, we must remember that the numbers might not be as accurate as we would hope. Rates are still great, there is $8K on the table for a few more months for those first time homebuyers and homes are affordable...GET OUT THERE AND BUY!!!!!

The Government "Helps" Again...

2009-07-31T07:41:00.002-07:00

Yesterday, July 30, marked the beginning of the HERA laws. HERA effects banks and brokers by making sure that rates and fees are disclosed in a timely manner. If the rate and fees change enough to effect the annual percentage rate (APR) by more than .125%, then new disclosures must be sent out. There are to be no fees collected (except a credit report fee) until the initial disclosures have been sent and a waiting period has elapsed.
It sounds so simple and it looks like it makes sense, but in essence between the new HERA laws and the new HVCC appraisal systems a once 30 day escrow may take upwards of 60 days. The current Truth-in-lending laws and RESPA laws required that interest rates and fees be disclosed within three days of application (an application is not complete until a property has been identified-in contract). Usually when this initial disclosure goes out, the rate has not been locked, the escrow company has not yet sent fees, for brokers; a lender may not have been selected yet. So it is very typical for numbers to change.
Here is what happens under the new law. An application is taken and we will assume for this example that a property is in contract. The broker or banker will then register the loan. Initial disclosures of proposed rate and fees will be sent via email or snail mail to the borrower. If done by email, the broker/lender can order the appraisal on the fourth day after receipt of the disclosure. If you don't have email, there is a three day send a three day receipt time, the appraisal cannot be ordered until day 7. Assuming this is a non-government loan, the appraisal can now be ordered. The client will need to provide a credit card as these companies do not allow you to bill escrow for the appraisal. The third party appraisal company then hires an appraiser, the appraiser contacts the agents and clients, an appointment is set and hopefully before 2 weeks have expired you will have your appraisal. Now mind you, if there are any issues on the appraisal, no one is supposed to know until the appraisal is received. Maybe the appraisal comes in $10k less than the contract price, maybe there is dry rot and the appraiser is requiring a pest inspection on an "as is" sale. All issues that can derail the deal. Also, days as counted for disclosures and appraisals do not include Sunday's or holidays for disclosures and appraisals we can't count the weekends or holidays.
Now assuming everything comes back perfect...the loan can be locked (it could have been locked previously, but depending on how quickly the appraisal comes back you may get into an expiring issue, this really comes into effect if the market has worsened since the loan was locked). If everything has stayed exactly the same, the rate is the same, the title and escrow fees are the same, then no more disclosing, the underwriter can underwrite the file, clear for loan documents and the purchase can continue like nothing has changed. But in the volatile market we live in, rates move up or down it doesn't matter. If a change to the APR is more than .125% then a new disclosure has to go out, the same time frame applies, and loan documents cannot be printed until either the fourth or seventh day depending on delivery method. Remember though it is not just rate that effects the APR it is also fees. If the appraisal came in low, the structure of closing cost payment may change (this really doesn't effect credits, it effects when the seller pays certain costs 100% then they are changed to 50% or 0%).
I am not complaining per say about the new laws, I do think they are redundant from what we already had. What I am saying is that in the past two years lending has changed dramatically, especially in the California markets. These laws are going to change it again. Prepare yourself, don't write 30 days escrows until the brokers/lenders have time to get the bugs out. It is much easier to write a 60 day contract and close early, than it is to write a 30 day contract and get extensions. If you have any questions regarding this information, please don't hesitate to call or email me.

2009-07-21T14:07:00.001-07:00

We are almost to mid-week and the MBS are having a nice rally. Not sure how long it will last, but it is nice to have some positive days in our market. Be aware if you are in the process of making a purchase or refinancing your home, that guidelines are constantly changing. There are little things as borrowers that you can do to make your loan easier. Don't apply for credit. Letters of explanation will have to be written and proof that no additional credit has been extended.
This is just one little way to make your life easier during the loan process.

Happy 4th of July

2009-07-06T09:25:00.000-07:00

This weekend flew by. Even though we had 3 days, my family was as busy as ever on the softball and baseball diamonds. The market may be a little volatile this week as some of the traders have taken an extended holiday. The stock market is sluggish and the MBS market is near a tough ceiling of resistance.
There are many decisions being made on the state and federal level that affect our day to day lives without us even realizing it. I think as a community, state and country, we need to be heard better by those we vote into office. It may be time we all sit down and write letters, emails, make phone calls. Decisions are being made in a knee jerk fashion that are going to cost us Trillions of dollars in the long run. Don't be shy, let our elected officials know what we really think about what is going on.

Monday of a Short Week

2009-06-29T10:10:00.000-07:00

Where does the weekend go? It seems if you blink, you miss it. For me, it goes to softball and baseball tournaments. Which really is a great way to spend a weekend, if the weather isn't hit record high heat. Our pool was the most inviting I think it has ever been, when we came home from Sunday's softball outing.
Bonds have done well over the last week, but are facing a strong ceiling of resistance. The floor of support is over 50 bp below, so any volatility could see big swings in value. It is a holiday week and for some reason with less trading comes more volatility. So we will need to watch the MBS market and see where we are headed.

Nice Reaction

2009-06-26T08:55:00.000-07:00

The Federal Reserve Board decided to leave the Fed Funds rate unchanged. The comments released by the Board also made deflation less of an issue and put inflation out at a safe distance. The Mortgage Backed Securities (MBS) market ended Wednesday neutral and actually that was a very nice way to end a day with that much information. Thursday the market decided that the Fed had it right and MBS got a nice little lift above the 200 day moving average. Today we are watching the markets very carefully as much of the reports came in neutral. If the stock market decides to re-test and surpass the 200 day moving average for them, then bonds may pay the price. Volatility is still the name of the game and constant monitoring is all we can do.

Fed Starts Meeting Today

2009-06-23T08:02:00.000-07:00

The Federal Reserve Board begins its first of a two day meeting today. They will make their announcements as to what they see the market doing and how they are going to continue to "help" the American Economy. The consensus is that the fed funds rate will be un-moved, but that the Fed will begin to buy more long term Treasuries. If that happens, it has the potential to move Mortgage rates down.
There are still other factors at work here, that we must remember. The Treasury auctions that start today at 1pm EST flood the market with investments that may look more attractive than bonds. This competition in the market can drive mortgage rates higher. Also remember if rates drop, more refinances will hit the market and then there is added supply there also. This added supply usually accounts for worse mortgage backed security trading and higher interest rates.
This will truly be a wait and see environment.

It's Friday

2009-06-19T09:02:00.000-07:00

Happy Friday! This weekend should be pretty good, the weather is starting to feel like summer, families will get together to celebrate father's day, and I will hopefully have enough time to wash my windows. Glamorous I know. After the week we have had with Mortgage Backed Securities (MBS) , I will take window washing. Everyday was a learning experience as even the best days turned into down days. Interest rates are going to take awhile to recover from the hit that the MBS are taking. There is just too much supply and not enough demand. Even with the Treasury purchasing MBS, the supply is too great.
But let us put interest rates into perspective. A 30 year fixed conventional loan for a purchase with 20% down and credit over 740, we are still at 5.5%. This is not a rate to snub your nose at. There was a time (less than a year ago) that same mortgage would have been 6.5%. Since I started doing loans 12 years ago I have seen that rate as high as 9%. Talk to anyone in the mortgage market in the 70s and early 80s and they will quote you anywhere from 12-18%.
That being said if you are considering refinancing and have a rate of 6.5% or more JUMP off the fence now and do it! If you are a buyer, no one knows where the rates are going to go, but can you really justify not purchasing a home at 5.5%? Your landlord is probably paying more than that on his mortgage. There is no more time to sit on the fence, it is time for action.
One last rant before I log out...a moratorium on foreclosures just prolongs the inevitable. If someone hasn't made a payment in 6-12 months another 3 months isn't going to help. Let's move forward, help those who are not so far behind keep their homes and be done with this heinous market.

Government Regulation

2009-06-18T08:25:00.000-07:00

I understand that there are times that the government needs to regulate an industry. I also understand that the mortgage industry has been riddled with issues but the latest "blueprint" for regulatory changes places the blame on mortgage brokers and does not look to: investor greed, credit rating agency mistakes, Wall Street GREED, consumer negligence, Bond fund propagation of exotic mortgage products, not to mention that bank originators are encouraged (pushed) to sell the product that will make the bank the most money.
I am a trustworthy mortgage originator, I follow the rules, I care about my clients and I rely on my relationships to further my business. I don't think any originator needs to make 4 points on a loan, but I also think an originator making that kind of money will not stay in business very long. If the government would actually make all mortgage originators comply to the same rules and not have two sets for mortgage brokers and mortgage bankers, that would be a huge step in the right direction. Second step, utilize the current rules that protect consumers and don't make new ones that just make consumers pay more in the long run.
On a rate note, mortgage backed securities have hit another ceiling of resistance and with the Treasury issuing another round of supply next week, it would be prudent to lock now if you are currently in contract.

Elevator UP!

2009-06-10T07:51:00.000-07:00

The recent climb of mortgage rates has everyone clamoring. Why though in a three week span can rates go from 4.75% to 5.75%? The reason is too much supply and not enough demand. The mortgage backed security market is made up of just that "mortgages." Rates have been so good for an unbelievable amount of time, that many of you who have owned for just 6 months, have been able to benefit from the new lower rates. That puts more supply because refinance loans become the mortgages in the mortgage backed security market. Figures came out yesterday stating that 70% of all transactions are refinances. That is up so much from this time last year. The government is also auctioning t-bills what seems like every other day. These factors have investors, wall street, main street, and the world now worried about inflationary risks.
What do we do? Maybe that is the problem, maybe everyone is doing too much to try and fix the problems instead of letting them correct themselves.
The past 4 years brought much to the forefront on laxed loan guidelines and interpretation of those guidelines. The government has made laws, to fix everything. They have said there shall be no more stated loans...the market got rid of stated loans six months prior to the ruling. The government, "to protect consumers and banks" has placed the HVCC into effect. It is a law that governs how appraisals can be ordered and who can speak to the appraiser. It is to help decrease pressure on appraisers to deliver appraisals that are above value or not disclosing certain issues with properties. Every lender I work with has a black ball list. If an appraiser is found to be fraudulent in any manner, they will no longer accept that appraiser's reports. The banks were self policing. Now we have this new rule, that is more expensive for consumers, and takes about 4 times as long to complete. If the government would let free enterprise do its jobs, the banks would have fixed it, because it is their bottom lines getting desimated, not the governments. But now that the government is in the business of big banking, I guess they want a safety net.
I am done ranting for today. Until the next new issue...or wave of crazy changes.

Roller Coaster Ride!

2009-05-27T15:43:00.000-07:00

Mortgage Backed Securities started off mildly down today, then the bottom fell out and we were on the Tower of Terror. Can anyone say elevator DOWN! The market lost 207 basis points today. In the time I have been monitoring the market, I have never seen this kind of drop. What does that mean to everyone out there? It means that interest rates are going to be on an elevator UP! We have already seen rates move from 4.75% this morning to 5.5% this afternoon. Don't let this information scare you, though. 5.5% on a 30 year fixed rate is phenomenal. This is still a great time to buy and take advantage of all the government incentives and programs available. Call me or email with any questions.

Mortgage Scams

2009-04-09T07:22:00.001-07:00

Alert - Don’t Become a Victim of Mortgage Scams

The Obama Administration recently announced the Making Home Affordable
Program, designed to assist up to nine million American families
refinance or modify their loans to a monthly mortgage payment that is
more affordable. Due to the overwhelming interest in the plan,
homeowners are increasingly becoming the target of scammers trying to
take advantage of families with false promises and steep fees to provide
foreclosure assistance. With President Obama’s plan, a homeowner NEVER
has to pay to participate in the program. If you wish to obtain
counseling assistance, HUD urges you to contact a local HUD-approved
housing counseling agency to ensure they are receiving legitimate
information. www.hud.gov

Mortgage Changes

2009-03-11T10:54:00.001-07:00

The mortgage industry is changing daily. New rules are always being added. If you are looking to purchase a home, it is imperative that you speak to a mortgage professional and get pre-qualified if not pre-approved. A 600 credit score doesn't even cut it for FHA any more. You need a 620 middle credit score to purchase a home. That doesn't mean all hope is lost, it just means that you need someone that knows what they are doing to look at your credit and help you improve your position before you go out looking at properties. If your credit is good, then you can start shopping right away, but if you need to work on it, isn't it better to know now rather than later. For those of you wanting to use conventional financing 680 is your new number.
On the Obama Mortgage Plan front: last week saw the government roll out their new plan. Along with it all of the skepticism, there was everyone weighing in. There is a great website http://www.financialstability.gov/. This website has a lot of information on who to contact and what you will need in order to do so.
Please feel free to call or email me if you have any questions as I would like to help everyone either purchase a home or stay in their home.

The Holidays are Here!

2008-12-01T13:39:00.000-08:00

I cannot believe that it is already December 1. Time is flying by. Last week was a great week for stocks, but it was all lost today as the market is closing after losing over 600 points. The bond market was faring very well this morning, but has since turned neutral. But neutral in this market is actually very good. Interest rates are low, lower than they have been since May 2005. If you have equity left in your property and are paying more than 6.25%, now is the time to refinance that mortgage. Call me, we can see if a refinance will benefit you financially.

What is going on with Mortgage Rates?

2008-11-20T11:18:00.000-08:00

The Fed minutes from the October Fed Meeting were released on Wednesday November 19, 2008. The minutes expressed concern over the health of the economy and their future targets from employment and growth were lowered. But the big news was the word “deflation.” The Fed, after years of being concerned with inflation, now says they are concerned about deflation. The news shocked the financial markets, pushing Stocks sharply lower while directing enormous money flow into ultra-safe Treasury Notes. Now if you are watching conventional news sources then you would assume that this move would be improving mortgage rates. However, this is not the case. The Treasury Notes does not directly affect mortgage rates. Mortgage rates are directly affected by Mortgage Backed Securities.
While T.V. and print news would have you believe that the 285 basis point jump in the Treasury note arena is a phenomenal move for mortgage rates, it just isn’t true. The Mortgage Backed Securities Market has only seen a 12 basis point increase. That means that rates are good right now, but that they are holding steady and not improving by leaps and bounds.
Deflation is when prices drop, mainly due to decreases in money supply and credit. With the economy slowing down, we are hearing some people say we are in for a deflationary recession. In a deflationary environment, investors flee into fixed instruments like Bonds because the fixed payment received would actually buy them more goods and services over time.
A similar event took place back in the Spring of 2003 when Alan Greenspan uttered the deflation in a statement. Mortgage Bonds rallied at that time and set off the refi-boom of 2004. The market is much different now than it was in 2003; tighter lending guidelines and reduced equity.
For homeowners who have not utilized a refinance since the last “boom,” may be able to lower their rate in the near future. Being connected to a mortgage consultant that watches the market and knows how to interpret what is happening, is the best first step any homeowner or future homeowner could take.

What A Month!

2008-10-23T20:27:00.001-07:00

October has been quite a month. My right hand, Patty, was gone on vacation and it seems that all heck always breaks loose when she is gone. We are finally caught up! Loans continue to change. Everyday there is a new guideline to be aware of. California has been in the crossfire of many loans being discontinued, but only in our state. Yesterday, Radian Mortgage Insurance decided to start insuring loans with only 5% down again. That means for clients with great credit scores and 5% of their own funds can obtain conventional financing. Conventional guidelines are a little more lenient when it comes to property condition. FHA is still my personal favorite for low down payment consumers.
I would like to thank Mr. Cleghorn for utilizing my services in his recent investment purchase. We closed right on time, a miracle in this market.
Congratulations also to Mr and Mrs Mahler. They have been waiting patiently since April for the bank to approve their purchase, once the seller's bank was on board, we closed their escrow in 3 weeks and right on schedule. I am ecstatic for this couple as their patience netted them a great rate and a savings of $60,000 on their home. Welcome Home Mahler family!!!

The Wait is OVER!!!

2008-10-02T07:22:00.000-07:00

Have you ever wanted a home to be yours so much you just couldn't stand it. Most of you know this as offer after offer have been countered or rejected due to a multiple offer situation as of late. But Mr. and Mrs. VanVliet of Escalon, were actually living in their home on an option to buy and had to wait for the county to finish their job before they could buy their home. Could you imagine waiting on one government entity to figure out the boundaries of your home, while all the other government agencies are changing the loans that are available to you. Well, all is well now and Mr. and Mrs. VanVliet can call their home...theirs. Congratulations! P.S. Mrs. VanVliet had a beautiful baby girl while all of this was going on. A double Congratulations!

Mr. & Mrs. Smit Purchase Their Home

2008-09-22T17:01:00.001-07:00

Greg and Rebecca closed escrow on their first home Friday. It was such a pleasure getting to help them. They had been looking for two years, and went back to the home they originally fell in love with. This is a great move for Greg as he gets to come home to Ripon, where he grew up. Both families are happy and I cannot wait to take a picture for my site. Congratulations!

Interest Rates

2008-09-16T07:25:00.000-07:00

It seems that fall is a great time to start watching rates. The turmoil in the mortgage market started late last summer on wall street, and that turmoil has once again gained speed. As a mortgage professional who watches the stock and bond markets minute by minute, it is hard to watch the news. There is so much speculation and uneducated guesses about what rates are going to do. Mortgage rates are not directly tied to what the Federal Reserve does. The Fed's decisions will positively or negatively affect investor's decisions on where they put there money. If at 2:15 e.s.t. the Fed decides to lower the fed funds rates, you will most likely see an increase in mortgage rates as mortgage backed securities will see this as an inflationary move. The fed's last cut in January 2008 is just now being felt in the markets. Personally I think the fed should give their previous decisions time to work. A cut now would help the stock market, but it will be a bump (maybe a big one) for mortgage bonds and therefore rates.
If you would like to find out more about the market, log onto my website at www.abilitymortgage.com and click the link to market news. It is a great tool and is updated daily on what the market is doing. Call or email me if you would like to discuss this topic more. dromero@abilitymortgage.com.

Newest Home Owners

2008-09-08T14:11:00.000-07:00

I would like to congratulate Mr and Mrs Bays of Modesto, California on the purchase of their first home. They were very patient as they made an offer on a short sale. It took 3 months for the bank to approve, but just 21 days for us to close the deal once they got the green light. I am so happy that I was able to be a part of this exciting time. Congratulations!