Mortgage origination pro update

As Rates Rise... Adjustables Are Coming Back Comparing Mortgage Options For Mortgage Advisors Weds, Aug 7 2:00 pm to 3:30 EDT Subscribers and Trial Members Only Sign Up For Trial Now Click Here So many loan officers like to call themselves trusted advisors. What does that mean? It means that you can help your clients make the right decisions. The decision concerns more than computer software programs, but also includes emotions and needs. As rates rise, expect the competition to increase as well as the range of options expand. Those who can help prospects make better decisions will continue to thrive. Those who sign up for a free 14-day trial of the OriginationPro Marketing System will be registered automatically. This trial has no obligation--we just want you to look at the system. More information on what the system provides is below. ***************** Free TrialOriginationPro Marketing System ⇒Personalized weekly email newsletters; ⇒Library of real estate & finance articles; ⇒Library of personalized sales articles; ⇒Hundreds of personalized emails; ⇒Weekly personalized mobile alerts; ⇒Print newsletters, flyers and more; ⇒Certified Mortgage Advisor webinars--including webinars for your Realtors; ⇒Free downloads such as the Book of Home Finance, seminars, First Time Buyer Marketing Kit and more Sign Up For Trial Now Click Here *********************************** Don't Throw Prospects Away With rates rising, you must close every prospect. A compliant credit repair company you can rely upon for advice and service -- Credit Repair Resources was voted the best small credit repair company in America! Get your prospects qualified with the best service available. Credit Repair Resources Chad Kusner 888.927.7760 chad@crr760.com CRR Site July 30, 2013 ⇒ Here Comes The Jobs Report ⇒ Guarantee Fees To Rise Again? ⇒ Visiting Open Houses ⇒ The State of Housing Here Comes Another Employment Report In a few days, we shall see the release of another monthly jobs report which will end a week of massive data releases. These releases include private sector payroll growth for July, personal income and spending for June and the first reading of economic growth for the second quarter. As important as all of these releases are, they pale in importance to the jobs report which has had a great effect upon the markets each month thus far this year. This has been especially true with regard to the release's effect upon interest rates. Positive releases at the beginning of the year caused rates to start creeping up. A disappointing release for March caused rates to ease back, however this process was reversed one month later when March's numbers were revised. The past two months have seen positive reports and it is no coincidence that rates have continued their climb--with a spike after the July release. Rates have eased back a bit from that point and analysts are busy trying to determine what the next report will bring to the markets. What do we believe? Eventually, employment gains of close to 200,000 per month should become a common place event and it will take even larger numbers to move the markets significantly. Does that mean that we have already reached this point and any number well below 200,000 will be seen as a disappointment which may cause rates to decrease and the stock market to fall back? We will find out the answer to this question in only a few days. Keep in mind that each month contains a revision of the previous month's numbers and these revisions can affect the analysis as well. Rates eased back for the second straight week. Freddie Mac announced that for the week ending July 25, 30-year fixed rates fell from 4.37% to 4.31%. The average for 15-year loans decreased to 3.39%. Adjustable rates were slightly lower, with the average for one-year adjustables slipping to at 2.65% and five-year adjustables falling slightly to 3.16%. A year ago 30-year fixed rates were at 3.49%. Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac -- "Rates on home loans eased for the second consecutive week which should help to alleviate market concerns of a slowdown in the housing market. Thus far, existing home sales for June were the second highest since November 2009 and new home sales were the strongest since May 2008. In addition, the low inventories of homes for purchase are putting upward pressure on house prices. For instance, the FHFA purchase-only house price index increased for the 16th consecutive month in May and was 7.3 percent above the May 2012 figure; May's index level was the highest since September 2008." Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes. Current Indices For Adjustable Rate Mortgages Updated July 26, 2013 Index July 25 June 6-month Treasury Security 0.06% 0.09% 1-year Treasury Security 0.12% 0.14% 3-year Treasury Security 0.62% 0.58% 5-year Treasury Security 1.38% 1.20% 10-year Treasury Security 2.61% 2.30% 12-month LIBOR 0.684% (June) 12-month MTA 0.159% (June) 11th District Cost of Funds 0.951% (May) Prime Rate 3.250% The Ask The Expert Column is sponsored by NACSO. NACSO –- National Association of Credit Services Organizations -- advocates for strong industry standards, consumer protection, and ethical business practices for the credit repair industry. For more information of NACSO's Standards of Excellence and NACSO membership, Click Here. To read the latest blog article on NACSO's site, Why Disputing Credit Report Errors The Way The Experts Recommend Could Hurt, Not Help, Click Here I have been advised by my branch manager to start visiting open houses on the weekends. However, I have no idea what to say to the Realtor holding the house open. Any ideas in this regard? Bob from Virginia The first question I would have here is whether you know the Realtor and planned the open house visit with them or are you cold calling the open. If have been reading my columns, I certainly would recommend planning the open house visit--starting by helping the agent market the open house to your other agents and sphere of influence. This will enable you to prepare with an open house flyer or listing spreadsheet as well as other materials to support the open. You can offer to sit and pre-qualify those who come to the open house, supporting the agent. This is especially helpful if the open is going to be very busy. It can also be helpful if the open is in a remote location and the agent is nervous about being in a home all afternoon alone. Either way there will be some "one-on-one" time and you should make use of that time to discuss other ways of how you can support the agent's efforts. Of course, not much of this advice applies if you are cold calling an open house. We will address that situation next week. The first step? Research! Dave Do you have a reaction to this commentary or another question you would like answered? Email us at success@hershmangroup.com. Breaking News: Since 2011, the government-sponsored enterprises’ average combined guarantee fees have nearly doubled. Last year, the g-fee hike was due to legislation designed to offset temporary reductions in federal payroll taxes and the Federal Housing Finance Agency’s initiative to increase private investment in residential loan credit risk. Going forward, the FHFA plans further enterprise g-fee increases to spur private capital, but it’s not yet clear how high the conservator must increase such fees to achieve its objectives, according to the latest report by FHFA’s Office of Inspector General. The FHFA argues that federal financial support for the GSEs over the years has permitted both to set their g-fees at "artificially low levels," thereby increasing the risks and competitors out of the market. This has caused the Office of Inspector General to assess the effect g-fee hikes will have on the housing finance system and whether this will hinder a private sector comeback. "FHFA has not yet defined what it means by ‘increased private sector investment in credit risk’ or developed measures thereof. The term could mean something as limited as a greater willingness on the part of lenders to hold home loans in their portfolios rather than sell them to the Enterprises," the Office of Inspector General explained in its latest report. The report continued, "Alternatively, it could mean something as far-reaching as a revival of the private-label mortgage-backed securities (PLMBS) market." Without a specific definition the FHFA will encounter challenges that may counteract its initiative, including a significant increase in g-fees — under some scenarios — could result in higher home loan borrowing costs and dampen both consumer demand for housing and private sector interest in credit risk. Additionally, certain federal regulatory initiatives, while designed to combat unfair lending practices, could have a potential trade-off, such as limiting private sector incentives to invest in more credit risk. As a result, the OIG suggests FHFA should seek to establish a more formalized agreement with the Federal Housing Administration to assess key issues in the housing finance system. "FHFA may realize additional benefits by seeking to establish a more formal working relationship with FHA and jointly assessing the key issues that may affect their pricing initiatives," the report noted. For instance, the agencies could assess the potential implications of the Department of Housing and Urban Development’s recent decision to halt further FHA premium increases even as FHFA continues to raise its g-fees. A pricing disparity between g-fees and insurance premiums could shift a portion of the enterprises’ business and the associated risks to FHA without an overall increase in private capital. Source: HousingWire Driven by rising home prices and growing demand, the U.S. housing recovery is well underway, concludes The State of the Nation’s Housing Report, released by the Joint Center for Housing Studies of Harvard University. While still at historically low levels, housing construction has finally turned the corner, giving the economy a much-needed boost. But even as the recovery gains momentum, millions of homeowners are still delinquent on their home loans or owe more than their homes are worth, and severe housing cost burdens have set a new record. Driven by an increase of 1.1 million renter households, last year marked the second consecutive year of double digit percentage increases in multifamily construction. But the flip side of the strong rental market was the continued slide in homeownership rates. “Even as historically low interest rates have helped make the monthly cost of owning a home more favorable than any time in the past 40 years, the national homeownership rate fell for the eighth straight year in 2012,” said Eric S. Belsky, managing director of the Joint Center for Housing Studies. “The drop was especially pronounced for 25–54 year olds, whose homeownership rates were at their lowest point since recordkeeping began in 1976.” “Tight credit is limiting the ability of would-be homebuyers to take advantage of today’s affordable conditions and likely discouraging many from even trying,” says Chris Herbert, director of Research at the Joint Center for Housing Studies. “At issue is whether, and at what cost, home financing will be available to borrowers across a broad spectrum of incomes, wealth, and credit histories moving forward.” “With rising home prices helping to revive household balance sheets and expanding residential construction adding to job growth, the housing sector is finally providing a much needed boost to the economy,” says Belsky. “But long-term vacancies are at elevated levels in a number of places, millions of owners are still struggling to make their payments, and credit conditions for homebuyers remain extremely tight. It will take time for these problems to subside. Given the profoundly positive impact that decent and affordable housing can have on the lives of individuals, families, and entire communities, efforts to address these urgent concerns as well as longstanding housing affordability challenges should be among the nation’s highest priorities.” Source: NMP Daily The U.S. Department of Housing and Urban Development (HUD) published a new proposed rule to Affirmatively Further Fair Housing (AFFH) in the Federal Register today and made available background materials and a prototype geospatial tool. AFFH refers to the 1968 Fair Housing Act’s obligation for state and local governments to improve and achieve more meaningful outcomes from fair housing policies, so that every American has the right to fair housing, regardless of their race, color, national origin, religion, disability or familial status. “This proposed rule represents a 21st century approach to fair housing, a step forward to ensuring that every American is able to choose to live in a community they feel proud of – where they have a fair shot at reaching their full potential in life,” said HUD Secretary Shaun Donovan. “For the first time ever, HUD will provide data for every neighborhood in the country, detailing the access African American, Latino, Asian, and other communities have to local assets, including schools, jobs, transportation, and other important neighborhood resources that can play a role in helping people move into the middle class. Long-term solutions will involve various strategies, such as helping people gain access to different neighborhoods and channeling investments into underserved areas. ” The proposed rule was drafted in response to a 2010 GAO report and numerous requests from stakeholders, advocates, and HUD program participants seeking clear guidance and technical assistance. The proposed rule refines existing requirements so the individuals, organizations, and state and local governments implementing HUD programs better understand their requirements under the Fair Housing Act and have the tools they need to Affirmatively Further Fair Housing, ensuring that every American has the opportunity to live in the community of their choice without facing discrimination. Source: HUD The Consumer Financial Protection Bureau has issued a new batch of clarifications to its qualified mortgage and servicing rules. In originating a QM loan, the borrower cannot have a debt-to-income ratio greater than 43%. The final rule issued June 10 “clarifies and amends how several factors can be used to calculate a consumer’s DTI ratio,” the CFPB said. “Such factors include a consumer’s employment record and income, business credit reports and other documents relating to self-employed consumers, Social Security income, and non-employment-related income such as from a trust or rental property.” The final rule also clarified the standards lenders must meet in originating QM loans that are eligible for purchase by Fannie Mae, Freddie Mac or insured by the Federal Housing Administration. “Where a loan is eligible for GSE or agency purchase, guarantee, or insurance, creditors do not need to satisfy the types of procedural and technical requirements that are completely unrelated to the consumer’s ability to repay,” the CFPB said. The final rule also clarifies which loans should be counted in terms of the small servicer exemption and the bureau’s position on preemption of state servicing rules. Source: National Mortgage News With housing inventories so low, why aren’t homebuilders jumping in by ramping up production to meet demand? A new housing report by Arizona State University suggests that homebuilders are methodically holding back their inventories and keeping the rate of new-home building low, despite population growth projections. “New-home builders don’t appear too anxious to help meet the demand,” says Michael Orr, a real estate expert at ASU’s W.P. Carey School of Business. A few years ago, during the housing bubble, homebuilding outpaced population growth. But builders are taking the opposite approach this time around. In an environment with tight underwriting for loans, builders are exercising some caution and restraint. “They are trying to make sure they don’t overbuild like they did before the housing crisis, and they want to keep prices moving up,” Orr says. For example, Orr notes that in the Phoenix area, new-home sales rates are less than one-third of what is needed to keep pace with the projected population growth. He added that, with limited supply, builders are able to increase prices for new homes. Those in the building industry have cited labor shortages, tight underwriting standards, and the rise in lot prices as a reason building hasn’t kept pace. Source: Phoenix Business Journal