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FHA Announces Loan Fee Increases

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Minneapolis, MN: Thinking of getting an FHA home loan?  The Federal Housing Administration, commonly known as FHA just announced increases to mortgage insurance fees it charges homes owners by 10 basis points, or 0.10%.  This is on top of the massive fee increase from last year, which effectively doubled the cost of FHA mortgage insurance.

Swamped with a record $70 billion of claims from lenders on loans originated from 2007- 2009, the Federal Housing Administration Friday said it had no choice but to hike monthly mortgage insurance.

With the fee increase, the typical FHA borrower will now pay 1.35% of their loan amount per year in mortgage insurance. For example, a home with a $100,000 mortgage will now pay $112.50 a month in PMI. FHA said the fee increase will average $13.00 a month. Two years ago, the same $100,000 home would have only paid $45.83  a month.

The increase is designed to fix a reported a 16.3 billion deficiency in the FHA insurance fund as a result of defaulted loans insured during the housing crisis. While the mutual mortgage insurance fund shortage was projected at $13.48, this estimate is still well below the 2011 estimate of $14.67 billion.

FHA does actually do home loans, they insure the loans, which means lenders are more likely to do the loans knowing they have insurance on the loans against any losses. The increase insurance will greatly lessen the chances that the FHA will require a Government bailout to cover losses.

The Federal Housing Administration, currently insures about 16% of all home mortgages.

Banks cut mortgage balances for lucky few

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Five banks cut mortgage balances by $6.3 billion

Five of the biggest U.S. banks have cut struggling homeowners’ mortgage balances by $6.3 billion, part of a total $26.1 billion in home loan relief provided under a landmark federal settlement.

More than 309,000 borrowers got mortgage relief between March 1 and Sept. 30, according to a report issued Monday, Nov. 19 by those who monitors the settlement.  $13.1 billion of the $26.1 billion in relief was in the form of short sales, in which lenders agree to accept less than what the seller owes Another $1.4 billion in relief was provided by refinancing 37,396 home loans with an average principal balance of $210,398.

Banks also had $4.2 billion worth of loans under trial modifications. That could lead to permanent reduction in loan balances of $135,223 per borrower. All told, banks erased about $2.6 billion in first-lien loans and $2.8 billion in second-lien loans.

The federal government and state attorneys general for 49 states forged the $25 billion settlement in February with five banks: Ally Financial Inc., Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., and Wells Fargo & Co.

Mortgage rates set new record lows for week ending Nov 9, 2012

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Mortgage Rates Dip To New Record Lows *

Minneapolis, MN.  Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates dipping to new all-time record lows amid indicators of higher consumer confidence and lower wholesale prices. The previous record low for the 30-year fixed was set the week of October 4, when it averaged 3.36 percent, and the 15-year fixed was set the week of October 18, when it averaged 2.66 percent.

News Facts

  • 30-year fixed-rate mortgages (FRM) averaged 3.34 percent with an average 0.7 point for the week ending November 15, 2012, down from last week when it averaged 3.40 percent. Last year at this time, the 30-year FRM averaged 4.00 percent.
  • 15-year mortgages this week averaged 2.65 percent with an average 0.7 point, down from last week when it averaged 2.69 percent. A year ago at this time, the 15-year FRM averaged 3.31 percent.
  • 5-year adjustable (ARM) Mortgages (ARM) averaged 2.74 percent this week with an average 0.6 point, up from last week when it averaged 2.73 percent. A year ago, the 5-year ARM averaged 2.97 percent.

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Fixed mortgage rates eased this week to record lows on indicators of higher consumer confidence and lower wholesale prices. Consumer sentiment rose in November to the highest reading since July 2007 according to the University of Michigan. Meanwhile, the core producer price index fell 0.2 percent in October.”

Freddie Mac’s survey is the average of loans bought from lenders * last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s best MN and WI mortgage interest rates.

Interview Questions for your Real Estate Agent

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Buying or Selling A Home? Questions to ask your REALTOR®

1.  How does this Agent work?  Certain hours a day?  Certain days of the week?  Will you be able to find a mutually agreeable time frame? Full time, or part-time agent?

2.  What experience does this Agent have?  Do they have a specialty?  It’s difficult for a commercial Agent to sell a residential home.  The forms are different, terms, negotiations, etc.  Make sure they are capable of helping you in the type of real estate you are looking to purchase.

3.  How many successful transactions has this Agent had under their belt?  It’s not necessary for an Agent to be the highest top producer, but you need to know how versed they are in the entire process.  Asking a trusted friend for a referral might help you in this area.

4.  What happens if the Agent is out of town, calls in sick or just can’t make your scheduled times?  Does this Agent work with a Team, or have a designated assistant that can fill in, or will you have to wait for the Agent to return back to work to help you?

5.  And lastly an understanding of the expectations of all parties involved.

 

Low appraisals hurting housing recovery

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Story from KARE TV in Minneapolis / St Paul, MN. Story touches on it lightly, but misses the major issue that new mortgage lender / appraiser rules put into place in 2009, known as HVCC (Home Value Code of Conduct), now simply known as the Appraiser Independence rules, are the real problem. Appraisers are the holders of the countries equity, and the new rules have caused trillions of dollars in lost equity.

What do you think?

 

I messed up on my credit card and need your help

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I messed up on my credit card and need your help

I’m not a bad guy.. but I screwed up and need your help.  You see, I make a pretty good income, and I’ve tried to stay within my budget but things have gotten away on me.

First I paid my bills on time, but like so many others, I wanted things I can’t really afford. My solution was to apply for credit. With my good previous history, a was able to get a cool card with a gigantic limit.  At first I only put a little on the card, and making the payments was easy and pain free. I continued this for a long time, only to open the monthly statement to realize my balance was now 4 times my yearly income. I had way over extended myself.

I knew I had to stop spending more than I make, but I just couldn’t. It started to get even worse when my kids kept asking for things, and I just kept buying them. After awhile, it got so bad, I was now taking cash advances on my credit card just to make payments on my credit card.

The first thing I figured was I needed to cut off the kids.  I asked them if I could stop helping them, but they begged and cried because they had become dependent on me paying bills they should be responsible enough to pay themselves.  I kept pushing them, but they literally protested in the streets until I caved in. To keep their love, I kept paying their way for them.

To make it worse, many of their friends figured out I am a pushover, so they knocked on my door and asked me to fix their cars, help them catch up on their mortgages, and even to pay the banks back for some checks they bounced.  Like an idiot, I did. This added a huge amount to my credit card balance – but at least I made these other people happy.

I’ve gotten a few raises along the way, and while this helped a little bit, there was no way I was ever going to make enough money for this house of cards to work.  Fiscal disaster was on the horizon, as my credit cards were just about maxed out, and I just couldn’t pay down the balance fast enough. I kept saying – if I just had more money.

In desperation, last spring, I asked the credit card companies to raise my limits…  AND THEY DID!  How crazy was that? This gave me a little breathing room, but I just kept spending and spending, and now it looks like the end is finally near.

I need your help. Seeing as I can not control my spending, and I can not get the kids to stop demanding money, with my card maxed out, it will force me into a personal disaster of  defaulting on my credit cards, house payment, and car loan.

Will you please donate money to me so I can keep up my spending habits?   Please???

So who am I?  The United States Government.

The Democrats solution is to tax more. Unfortunately, you can claim that taxing the rich will solve the problem, but you’ll never be able to tax enough to make it work.

The Republican solution is to reduce spending.  I really do make enough money, I just spend way too much.

Nov 6th 2012 – The kids voted. They voted to keep their spending habits and the fiscal cliff is coming. Selfish bastards.

(C) 2012 – Joe Metzler.  Please forward but do not  remove my name – Originally Posted on www.MNRealEstateDaily.com 

 

Mortgages rates hover near record lows for week ending Nov 2, 2012

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Mortgage Rates Settle in Near Record Lows

Minneapolis, MN: Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates mixed following the monthly employment report but continuing to hover near their record lows over the past six weeks. Last year at this time, the 30-year fixed-rate mortgage averaged 3.99 percent, dropping below 4.00 percent for the first time since Freddie Mac started reporting its weekly mortgage rates survey in 1971.

News Facts

  • 30-year fixed-rate mortgages (FRM) averaged 3.40 percent with an average 0.7 point for the week ending November 8, 2012, up from last week when it averaged 3.39 percent. Last year at this time, the 30-year FRM averaged 3.99 percent.
  • 15-year fixed rate mortgages this week averaged 2.69 percent with an average 0.7 point, down from last week when it averaged 2.70 percent. A year ago at this time, the 15-year FRM averaged 3.30 percent.
  • 5-year adjustable mortgages (ARM) averaged 2.73 percent this week with an average 0.6 point, down from last week when it averaged 2.74 percent. A year ago, the 5-year ARM averaged 2.98 percent.

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Mortgage rates remained near record lows following the employment report for October. The economy added 171,000 jobs, above the market consensus forecast, and the two prior months were revised up a combined 84,000. The Labor Department also reported that the unemployment rate ticked up to 7.9 percent and that average hourly wages were unchanged.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s MN and WI mortgage interest rates.

 

The FHA 203k Rehab Loan in MN / Fix a Fixer-Upper

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Found your dream home – But it needs a little repair? The FHA 203k rehab loan to the rescue!

Minneapolis, MN: The FHA  203(k) loan program offers borrowers the resources to buy that great fixed-upper home opportunity. One single loan is used to pay for the purchase (or refinance) and the cost of renovating the home.

There is no doubt that the current real estate market offers a lot of great bargains on bank owned, Foreclosed, REO, Repo’d, etc homes. However,  many of these homes are in poor condition. Missing appliances, ruined carpet & flooring, holes in the wall, etc.  Most lenders don’t offer loan programs that will be able to help folks buy homes in this condition.

This is where a little known program called the FHA 203K Rehab loan comes in. The FHA 203K Rehab loan is becoming very necessary for the purchase of many Bank Owned, REO, or Repo properties.

FHA 203K streamlines loans make the process of buying a home that needs a little TLC (or quite a bit in some cases!) easier, more affordable, and quicker. Many of us have seen firsthand, or have heard stories about foreclosed home that have been torn up, stripped, vandalized, etc. With conventional financing, these homes are very difficult to sell or buy, as they are not in move in condition, and most lenders will not lend on a damaged home.

 

Is a 203(k) Loan Right for You?

  • Buy a “Fixer-upper” or REO property needing renovation
  • Get funds to both purchase and upgrade your dream home
  • Refinance and renovate your existing home

Advantages of 203(k)

  • Loan amount based on the home value including renovations
  • Only one loan needed to both purchase and improve
  • Refinance and rehab your own home

Can be used to buy property otherwise not eligible for financing

Who Qualifies?

  • A minimum down payment of 3.5%
  • A credit score of 640 or higher
  • You currently have no other FHA loans
  • You DO NOT have to be a first-time buyer
  • Home will appraiser for the purchase price PLUS repair costs
  • Loan amount meets FHA Loan limits, which vary by county (Check FHA  limits in your area)

 Download a Streamline 203K Presentation

 Download a Free Home Buyer Handbook

Mortgages Rates for week ending Oct 26th, 2012

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Mortgage Rates Continue To Hover Near Record Lows

St Paul, MN: Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates moving slightly lower while continuing to remain near their all-time lows this week amid signs of a growing economy and low inflation.

News Facts

  • 30-year fixed-rate mortgage rates (FRM) averaged 3.39 percent with an average 0.7 point for the week ending November 1, 2012, down from last week when it averaged 3.41 percent. Last year at this time, the 30-year FRM averaged 4.00 percent.
  • 15-year fixed rates mortgage rates this week averaged 2.70 percent with an average 0.7 point, down from last week when it averaged 2.72 percent. A year ago at this time, the 15-year FRM averaged 3.31 percent.
  • 5-year adjustable mortgage rates (ARM) averaged 2.74 percent this week with an average 0.6 point, down from last week when it averaged 2.75 percent. A year ago, the 5-year ARM averaged 2.96 percent.

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Mortgage rates remained relatively unchanged this week on signs of a growing economy and low inflation. The economy grew 2.0 percent in the third quarter with residential fixed investment contributing 0.3 percentage points to growth. The core price index of personal consumer expenditures grew 1.7 percent between September 2011 and 2012 and was within the Federal Reserve’s preferred target range.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s MN and WI mortgage interest rates.

 

After real estate crash, giant lenders allowed to dominate

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Minneapolis, MN:  Mortgage rates are so low that it may seem like a great time to get a mortgage. For banks, however, it probably is the greatest time ever.

In the old days, there used to be a word for this kind of thing: price gouging.

And who is doing the gouging? Mainly, Wells Fargo and JPMorgan Chase. In the third quarter, reported in the last several weeks, both banks earned robust profits from the mortgage business.

READ THE FULL STORY

 

Are home sellers stupid?

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“Broker Bryant, How much do you think our home is worth?” “Well, Mr. Need T. Sell, I think you house is worth about $260,000. However, I’m not here to tell you what your house is worth, I’m here to tell you what it will take to get it sold. In my opinion, I think we should Range Price your property from $239,000 to $259,000 trying to sell as close to $250,000 as possible.” He says in shock, “Broker Bryant, are you crazy? I just had it appraised 6 months ago and it appraised at $275,000! There is no way I am giving my house away at $250,000.”

Now being the “good looking” Realtor that I am, I respond, “Mr. Need T. Sell, you have been on the market for 6 months priced at $265,000 and told me you have not had a single showing. How has that been working out for you?”

He looks at me sternly and says, “Broker Bryant, the reason our house didn’t sell was because our Realtor didn’t do anything. We asked her to run an ad in the paper and she never did. All she did was put up a sign and put our home in the MLS. You can’t sell a house like that. I don’t know how they ever sell a house. All she ever did was call us every month and tell us to reduce the price. That’s the only time we ever heard from her. She’s the one that said she could sell our house at $265,000.”

READ THE FULL STORY

 

Wells Fargo issuing refunds to some FHA mortgage customers

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Thousands of Wells Fargo & Co. home loan customers recently received a surprise in the mail: refund checks from the big bank, along with letters saying they had paid unnecessary fees for their mortgages.

The unsolicited offers of thousands of dollars arrived with a catch — if the borrowers cash the checks, they can’t later sue the No. 1 U.S. home lender. The San Francisco bank, which is Minnesota’s largest by deposit market share, said in the letters that borrowers were put into more expensive loans when they could have qualified for cheaper ones.

READ THE FULL STORY

 

Has your Minneapolis area home LOST VALUE? HARP 2.0 can help you refinance!

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Has your Minneapolis area home LOST VALUE? HARP 2.0 can help you refinance!

Minneapolis, MN:  What is HARP? HARP stands for Home Affordable Refinance Program, an initiative from the Federal Housing Finance Agency (FHFA) to assist homeowners whose homes are now worth less than what they owe.  And just recently, new enhancements to the program were announced, making refinancing options available again to an estimated one million more homeowners.

If you are a responsible homeowner but the current marketplace loan-to-value (LTV) requirements and need for a new appraisal have made it difficult or impossible for you to refinance at today’s record low interest rates, lenders may be able to help you without needing a new appraisal or meeting previous LTV requirements.

The HARP “Special Refinance Program,” is designed to help up to 9 million American families refinance their loans to a payment that is affordable now and into the future. This program is aimed at helping responsible homeowners “refinance” their loans to take advantage of historically low interest rates. Here are some common Questions and Answers about the Refinancing Initiative in the program.

You may be eligible for a HARP 2.0 refinance if:

  1. The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  2. The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  3. The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  4. The current loan-to-value (LTV) ratio must be greater than 80%.
  5. The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.

If you answered YES to these questions, Click HERE to Apply for a HARP Refinance in the Minneapolis, MN area.

 

MN Mortgage Rates Remain Basically Unchanged

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Mortgage Rates Relatively Unchanged

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates moving slightly higher while continuing to remain near their all-time lows helping to support the housing market.

News Facts

  • 30-year fixed-rate mortgages (FRM) averaged 3.41 percent with an average 0.7 point for the week ending October 25, 2012, up from last week when it averaged 3.37 percent. Last year at this time, the 30-year FRM averaged 4.10 percent.
  • 15-year fixed rate mortgages this week averaged 2.72 percent with an average 0.6 point, up from last week when it averaged 2.66 percent. A year ago at this time, the 15-year FRM averaged 3.38 percent.
  • 5-year adjustable-rate mortgages (ARM) averaged 2.75 percent this week with an average 0.6 point, the same as last week. A year ago, the 5-year ARM averaged 3.08 percent.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Mortgage rates remained relatively unchanged this week and should continue to support the housing market and mortgage refinance. Existing home sales in September eased slightly to 4.75 million but was the second strongest annualized pace since May 2010. Moreover, new home sales rose to the most since April 2010. In addition, low rates and strong demand have already pushed the FHFA purchase-only home price index in August to its highest level (seasonally adjusted) since June 2010. And not surprisingly, the Federal Reserve in its October 24th monetary policy announcement acknowledged the further signs of improvement in the housing sector, albeit from a depressed level.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s MN and WI mortgage interest rates.

 

Waiting for lower rates could be costly

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St Paul, MN: We get it. You want the lowest mortgage interest rates. What you may not realize is that waiting for that low rate could make you your own worst enemy.

When shopping mortgage rates, understand that the quote you got yesterday or last week is meaningless. Interest rates can change throughout the day and that may cost you dearly while you think about it. Face it, rates change daily – sometimes even multiple times in one day.

Did you know you can pick any interest rate you want? Do you know the difference between the rate and pricing for the rate? Are you willing to pay the price to get a rate? Do you want lower closing costs? Has your loan officer explained these options and differences?

Have you ever thought “When the rate hits (your rate here), I’ll lock.” When the rate does hit your mark there is nothing lenders can do because the application/approval process hasn’t begun. Knowing this here is a simple plan to position you to lock in rates that meet both your payment and equity objectives.

1. Call a local licensed loan officer (not a bank) and begin discussing the refinancing of your home, along with the best rate and cost options to fit your needs.

NOTE: It goes against the grain of what most people think, but your current lender is almost without fail, the most expensive refinance option.

2. If the refinance rate and savings makes sense, start an application with your local lender, but don’t pay any application fee. You may have to pay a small fee to have them pull your credit. If they request/demand an application fee, or have cancellation fees you should select another lender no matter how great their interest rate quote appears.

3. Once the lender has you in application you’re now in a position to lock in a rate that meets both your payment and equity objectives and in the interim you can begin gathering all the needed items to seek an approval for you loan. Starting an application and signing the initial disclosures does not constitute a contract. You are under no obligations at this time to continue.  It does however, allow for an approval, which simplifies the entire process and puts you in the best position of strength for obtaining and locking your rate or making an offer on a new home.

Should you lock a rate, or hold out for something better?

We are asked this question an untold number of times a week. Everyone wants “the lowest rate” and no matter what great refinance rate I quote, human nature takes over. Everyone panics about locking today, because “what if rates go lower next week?” The first question to ask yourself is “Does the rate meet my payment objective?” If so, then lock, it really is that simple.

When the decision to lock has been made there are three possible outcomes;

  • Rates drop – ok, not good, but usually not enough to realistically impact a decision.
  • Rates remain the same – No worries
  • Rates go up – Lucky me, I locked!

So using the three outcomes above you only have a 33% chance of a rate improvement, and a 66% of no change or rates going higher.  What kind of gambler are you?