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Sep 13, 2012 by

 

Mortgage Backed Securities Movements for Thursday

 

 

 

Mortgage Backed Securities react to today’s Federal Open Market Committee (FOMC) report and go positive after the report. In addition, the stock market is up over 200 points as the Federal Reserve announce another round of quantitative easing (QE3). Stay tuned to see the effect of these moves over the upcoming months.

David Levitt and Michael Taormino are Mortgage Loan Officers in Michigan and work at Main Street Bank and are licensed in 50 states. Join them on Facebook at Metro Detroit’s Best Home Loans and Metro Detroit’s Best Realtor Resource. David can be reached by phone at (248) 330-5888 or by email at dlevitt@mainstreetbankmi.com . Michael can be reached by phone at (248) 318-9111 or by email at mtaormino@mainstreetbankmi.com.

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Sep 13, 2012 by

 HARP (Home Affordable Refinance Program) was a refinance program for qualified “underwater” Fannie Mae and FreddieMac mortgage holders. There is now TALK that the program may be opened to to homeowners that have equity.

Senators Barbara Boxer (D) California and Robert Menendez (D) New Jersey re-introduced a bill that previously died in the Senate in May, 2012. According to the Mortgage New Daily , the new bill would allow borrowers that have equity in their home and who are current on their Fannie/Freddie loans, to enjoy similar benefits that their “underwater” neighbors currently have.

Mortgage News Daily goes on to report that the new bill, if passed, would do the following:

  • “Remove barriers to competition.   The lender currently servicing a loan has an advantage over a new lender which faces stricter underwriting criteria and greater risks from the GSEs’ reps and warranties should the borrower default.  These different standards have hindered competition, resulting in higher prices and less favorable terms for borrowers.  The proposed legislation would direct the GSEs to require equalize the underwriting and associated reps and warranties between new lenders and current servicers.
  • Guarantee equal access to streamlined refinancing for all GSE borrowers.   The revised HARP guidelines continued to distinguish between borrowers with LTVs above 80 percent and those below, leaving higher equity borrowers with greater costs and administrative burdens and effectively locking them out of the program.  The bill will allow all lenders to offer a single, streamlined program to all GSE borrowers who have been paying their loans on time.
  • Eliminate up-front fees completely on refinances.   Under enhancements to HARP earlier this year, some fees for HARP loans were lowered and others were eliminated completely, creating what the sponsors call an economically indefensible situation in which borrowers with significant equity face steeper costs for refinancing than borrowers with no equity and hence presenting considerably greater risk.  These additional fees can be as high as two percent of the loan amount.  The bill prohibits the GSEs from charging up-front fees to refinance any loan they already guarantee, which is also in the best financial interests of the GSE’s and taxpayers.
  • Eliminate appraisal costs for all borrowers.   Borrowers who live in communities without a significant number of recent home sales are often precluded from the Automated Valuation Models widely used by the GSEs and must pay hundreds of dollars for a manual appraisal to refinance.  The proposed bill will require the GSEs to develop additional streamlined alternatives to manual appraisals, eliminating a significant barrier and reducing cost and time for borrowers and lenders alike, especially in rural areas
  • Further streamline the refinancing application process.   Since participation in HARP requires that borrowers be current on their loans and with a demonstrated commitment to timely payments, there is no reason to require proof of employment or income for these loans.  The GSEs already own the risk which will only decrease with lower interest rates and payments.  The bill eliminates employment and income verification requirements, further streamlining the refinancing process and removing unnecessary costs and hassle for lenders and borrowers alike.
  • Save taxpayers money.   The sponsors cite the Congressional Budget Office which says the bill will pay for itself through reduced default rates of existing GSE loans.”

There is no guarantee that this bill will pass based on the current divisiveness in Congress but the bill is supported by the Mortgage Bankers Association, the National Association of Realtors, the National Association of Home Builders and the Center for Responsible Lending.

David Levitt and Michael Taormino are Mortgage Loan Officers in Michigan and work at Main Street Bank and are licensed in 50 states. Join them on Facebook at Metro Detroit’s Best Home Loans and Metro Detroit’s Best Realtor Resource. David can be reached by phone at (248) 330-5888 or by email at dlevitt@mainstreetbankmi.com . Michael can be reached by phone at (248) 318-9111 or by email at mtaormino@mainstreetbankmi.com.

 

 

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Sep 13, 2012 by

It’s early September and home loan rates remain near historic lows. The Federal Reserve announced today that they are buying $40 billion of mortgage-backed securities each month (QE3) Now is a great time to consider a home purchase – if you can find good inventory. Refinances, including HARP loans for underwater borrowers, are booming.

 
Let us know if we can answer any questions at all for you and your clients. Metro Detroit’s Best Home Loans is here as a resource for anyone looking to buy or sell a home in Metro Detroit, Michigan or any of the 50 states that we are licensed in. Contact us by phone at (248) 330-5888 or email dlevitt@mainstreetbankmi.com  for any questions. We can always assist you in getting Pre-Approved for a mortgage and there is no cost. Let us know if we can be of assistance.

 

 

David Levitt and Michael Taormino are Mortgage Loan Officers in Michigan and work at Main Street Bank and are licensed in 50 states. Join them on Facebook at Metro Detroit’s Best Home Loans and Metro Detroit’s Best Realtor Resource. David can be reached by phone at (248) 330-5888 or by email at dlevitt@mainstreetbankmi.com . Michael can be reached by phone at (248) 318-9111 or by email at mtaormino@mainstreetbankmi.com.

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