Interest rates YET AGAIN have hit all-time lows! This taken From the Mortgage News Daily -

“After yesterday’s FOMC Announcement, Mortgage Rates moved to all time lows.  The rally in bond markets extended overnight and throughout today’s trading, resulting in rate offerings improving even more.

Please keep in mind that lenders simply cannot move mortgage rates lower at the same pace as a rapid rally in Benchmark Treasuries.  Although you might hear talking heads on TV or read articles saying that mortgage rates are tied to Treasuries, THEY ARE NOT, and you’ll be perennially frustrated if you expect them to be. Today’s Rates:  The current market is in a state of flux at the moment and mortgage rates moving up and down around ALL TIME LOWS. 

Whereas Best Execution 30yr Fixed rates were mostly near 3.875% yesterday with some lenders at 4.0%, today, they’re closer to 3.75% with quite a few lenders still at 3.875%.  FHA/VA deals are in a bit of a predicament that’s keeping them blocked off below 3.75% (there’s no secondary market for rates any lower than that right now!).  For similar reasons, 15 year fixed conventional loans may be stuck at 3.25%.  The secondary market factors driving adjustable rate loans are in a massive state of flux, but one that is mixed between positive and negative.  5 year ARMS remain near 3.125%, but with variations from lender to lender.  Bottom line, adjustable rates aren’t participating in this rally to the same extent as fixed rates.

Lenders also must be careful not to lower rates so quickly that borrowers who recently locked actually break those lock commitments in order to move down to a lower rate.  Even if borrowers do this at the same lender, it costs lenders a lot of money.  So whether it’s to avoid that sort of cannibalization or to avoid capacity issues, there’s an elevated risk right now of lenders RAISING rates without warning, even if the underlying market movements would not suggest it.  If you remember “the wall” that existed for a long time in loan pricing moving from a 4.75% Best Execution to 4.625%, the same underlying problems will make it a slow, difficult process to move from the high to mid 3’s, and one that might not happen at all.  If you’ve been waiting for an opportunity to lock in the high 3’s, you now have it.”

So if you are looking to refinance best to move quickly currently refinances are taking 45 days.  Feel free to contact us for a list of documentation needed to start the process.

Please email me at info@garrick.biz or fill out this form if you would like a quote for purchase or refinance:

http://www.garrick.biz/forms/rateTracker.html

Related Stories:

Information on the Government Refinance Program:

http://www.youtube.com/user/RealEstateBuzzz?feature=mhee#p/a/u/1/tLW3_dfS_SI

Debt Ceiling Raised Rates GO NUTS

http://www.youtube.com/user/RealEstateBuzzz?feature=mhee#p/u/5/Db_JxgC2xu4

Original Article…

http://www.mortgagenewsdaily.com/consumer_rates/230011.aspx

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The Carbon Monoxide Poisoning Prevention Act, Senate Bill SB-183, requires all single-family homes with an attached garage or a fossil fuel source to install carbon monoxide alarms within the home by July 1, 2011.

Here is one example of how a mortgage bank will handle this new stipulation:

California Properties: Effective July 1, 2011, all California properties (purchases, refinances and on all loan programs) require a Carbon Monoxide Detector. Since we do not want the borrowers to have to pay for a  re-inspection fee ($150-$165) for the installation of a $45.00 detector, if the appraisers did not indicate if a detector is present, the Underwriter will condition for the borrower(s) to provide evidence of the installation of the detector (copy of the receipt for purchasing the detector and photo of the installed detector is sufficient). We will not require a 1004D until August 1st to allow time for our AMC’s and borrowers to become compliant with this new California ordinance.

Apparently this is fairly common, even Weird Al Yankovic’s parent’s died in their home in Fallbrook, California from CO2 poisoning. “ One thing I would like to ask everybody to do, though… please, go out and get carbon monoxide detectors for yourself and your loved ones. If my parents had had one in their home, there’s a very good chance that they would still be with us today.” As sighted by Pinnacle Estate Properties.

So here’s info, courtesy of the California State Fire Marshal (CSFM)

What is Carbon Monoxide?

Carbon Monoxide is a colorless, odorless gas that is produced from heaters, fireplaces, furnaces, and many types of appliances and cooking devices. It can also be produced by vehicles that are idling.

What is the effective date for installing a CO device?

For a single-family dwelling, the effective date is July 1, 2011. For all other dwelling units, the effective date is January 1, 2013.

What is the definition of a dwelling unit?

A dwelling unit is defined as a single family dwelling, duplex, lodging house, dormitory, hotel, motel, condominium, time-share project, or dwelling unit in a multiple-unit dwelling building.

Where should CO devices be installed in homes?

They should be installed outside each sleeping area of the home including the basement. Follow the manufacturer’s installation instructions.

Are CO devices that are required by SB-183 to be installed in each room?

No. They are required by SB-183 to be installed outside of each sleeping area. For maximum protection against CO gas,it is recommended that a CO device be installed in each sleeping room.

Are CO devices required to be approved by the State Fire Marshal?

Yes. SB-183 prohibits the marketing, distribution, or sale of devices unless it is approved and listed by the CSFM.

If someone has a CO device that is not listed by the CSFM prior to the law, can they maintain it or does it have to be replaced?

Existing CO devices installed prior to July 1, 2011 may continue to be utilized.

For questions – info@garrick.biz

I cut and pasted this article from Mortgage News Daily just to update you on the 5% down FHA happenings…I will have more….

The Republican led House Financial Services Committee has drafted legislation that would, among other things, raise the FHA down-payment requirement to 5 percent and prohibit borrowers from financing their closing costs.

The draft legislation, ‘‘FHA-Rural Regulatory Improvement Act of 2011’’, was discussed today in a House Subcommitte hearing entitled “Legislative Proposals to Determine the Future Role of FHA, RHS and GNMA in the Single-and Multi-Family Mortgage Markets”.

In a formal release, the House Financial Services Committee’s Republican Chairman Spencer Bachus touted the bill as a coming at an important time in history, “This hearing and legislative proposal come at a pivotal moment, as the Committee debates the future of the mortgage finance system, and in particular, government guarantee programs that could expose taxpayers to significant losses.”

Industry advocates were quick to respond to the proposal as a move in the wrong direction. Michael Berman, Chairman of the Mortgage Bankers Asssociation, explained that down-payments are not the best indicator of payment default. Berman said, “Recently, policymakers have focused on required minimum down-payments as a measure of what factors are necessary to create sound lending practices. While down-payment certainly impacts default risk, other compensating factors, particularly full documentation of conservative loan products, are more influential mitigating factors.”

Berman went on to share the MBA’s opinion on the matter, saying, “The current minimum down-payment of 3.5 percent for borrowers with credit scores of 580 or above and 10 percent for borrowers with credit scores of 579 and below permits borrowers to have appropriate “skin in the game” while providing credit-worthy homebuyers with an option for entering the purchase market. Maintaining the existing minimum down-payment requirements, while requiring strong underwriting standards, such as full documentation and income verification, allows borrowers to responsibly become, and stay, homeowners.”

The MBA isn’t the only industry group to oppose the down-payment hike. Ron Phillips, President of the National Association of Realtors, shared similar sentiments in his prepared remarks. “NAR strongly opposes increasing the down-payment for FHA. The correlation between down-payment and loan performance is significantly less important than the linkage to strong underwriting, which FHA continues to have. FHA’s foreclosure rate remains less than conventional mortgages, so we don’t believe changes to the down-payment would do anything but disenfranchise many creditworthy homebuyers”.

Not all feelings were mutual though. The Cato Institute, a D.C. think tank devoted to limiting government participation in free markets, believes a combination of poor credit history and low down-payment requirements have resulted in “tremendous losses” for private mortgage investors and the FHA. In its prepared testimony Cato said, “Given the relatively “safe” features of an FHA loan, we do not have to guess about loan characteristics driving the borrower into default. We know it is equity and credit history that drives losses.”

Cato outlined a variety of FHA program reforms it believes must be implemented immediately to ensure taxpayers are exposed to minimal risk. These reforms include:

•Immediately require a 5 percent cash down-payment on the part of the borrower.
•Require FHA to allow only reasonable debt-to-income ratios.
•Restrict borrower eligibility to a credit history that is equivalent to no worse than a 600 FICO score.
•Require pre-purchase counseling for borrowers with a credit history that is equivalent to a FICO score between 600 and 680.
•Require a 10 percent down-payment, immediately, for borrowers with a credit history equivalent to below a 680 FICO score.
•Borrower eligibility should also be limited to borrowers whose incomes do not exceed 115 percent of median area income, so as to mirror the requirements of section 502(h)(2), as amended, of the Housing Act of 1949.
Besides raising the down-payment requirement, the proposed legislation would also cement the reduction of current “high-cost” loan limits. The maximum loan limits for Fannie Mae, Freddie Mac, and FHA are currently $417,000 with a temporary limit of up to $729,750 for one-unit properties in high-cost areas. The temporary high-cost area limit was first set in the Economic Stimulus Act of 2008, and was extended in subsequent legislation. It expires on September 30, 2011. Without the extension, the high-cost loan limit ceiling would revert back to the limits established under the Housing and Economic Reform Act (HERA), a maximum of $625,500 in high-cost areas.

The Obama administration already stated in its white paper that it will not support another extension of the higher loan limits, but the MBA believes the higher limits should be maintained until the housing market stabilizes and the private market shows more signs that demand has returned. MBA urged such legislation to be enacted well before October 1, 2011, in order to avoid certain market disruptions that will, because of rate locks, occur within 90 days of the current limits expiring. The National Association of Home Builders echoed that perspective.

NAHB First Vice Chairman Barry Rutenberg, a home builder from Gainesville, Fla., told the House Financial Services Subcommittee, “Counties across the country would see their loan limit reduced by tens of thousands of dollars, placing further downward pressure on home prices and impairing the ability of borrowers to use FHA-insured mortgages to purchase new homes,”

To keep FHA, Fannie Mae and Freddie Mac loan limits at their current levels, NAHB called on Congress to support H.R. 1754, the Preserving Equal Access to Mortgage Finance Programs Act, a bipartisan measure sponsored by Reps. Gary Miller (R-Calif.) and Brad Sherman (D-Calif.).

The draft legislative proposal will require a full Committee vote before it is formally introduced to be voted on by the entire house. Such measures would not be expected to pass the Senate.

Thanks to Mortgage News Daily:

http://www.mortgagenewsdaily.com/05252011_fha_downpayment_hike.asp

Clearly this article is much longer than usual but the content is important…

Today I am floored.  All the gains of the real estate market we saw from the Bush administration are officially gone. Lately, in The Werdmuller Group’s local market, Alameda, with somewhat of an emphasis on Harbor Bay Isle/ Bay Farm Island, I have seen huge losses in equity on properties I thought would appraise with no problem. Also, clients of mine who purchased in 2008, after the whole credit crisis thing had resided…mostly…have lost about 180K on a property they purchased for just under 600K.

I have been saying for months to clients “It’s unbelievable what is happening” however, I was still shocked!  Because the Mortgage News Daily’s Matthew Graham will say it far better than I…

“The indices, which are billed by S&P as the leading measure of U.S. home prices, are constructed to track the price path of typical single-family homes in a number of metropolitan statistical areas (MSAs).  The study uses matched price pairs of individual houses to construct a 20-City Composite Index and a 10-City Composite Index which are updated monthly. The indices have a base value of 100 which was set in January 2000.  Thus a current index value of 150 indicates there has been a 50% appreciation since that date for a typical home in the subject market.”

Excerpts From The Release…

The U.S. National Home Price Index declined by 4.2% in the first quarter of 2011, after having fallen 3.6% in the fourth quarter of 2010. The National Index hit a new recession low with the first quarter’s data and posted an annual decline of 5.1% versus the first quarter of 2010. Nationally, home prices are back to their mid-2002 levels.

Twelve of the 20 MSAs and the 20-City Composite also posted new index lows in March. With an index value of 138.16, the 20-City Composite fell below its earlier reported April 2009 low of 139.26.  Minneapolis posted a double-digit 10.0% annual decline, the first market to be back in this territory since March 2010 when Las Vegas was down 12.0% on an annual basis.

Eleven cities and both Composites have posted at least eight consecutive months of negative month-over month returns. Of these, eight cities are down 1% or more.

“This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation. The National Index, the 20-City Composite and 12 MSAs all hit new lows with data reported through March 2011. The National Index fell 4.2% over the first quarter alone, and is down 5.1% compared to its year-ago level. Home prices continue on their downward spiral with no relief in sight.” says David M. Blitzer, Chairman of the Index Committee at S&P Indices.

“The rebound in prices seen in 2009 and 2010 was largely due to the first-time home buyers tax credit. Excluding the results of that policy, there has been no recovery or even stabilization in home prices during or after the recent recession. Further, while last year saw signs of an economic recovery, the most recent data do not point to renewed gains.”

“Since December 2010, we have found an increasing number of markets posting new lows. In March 2011, 12 cities – Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland (OR) and Tampa – fell to their lowest levels as measured by the current housing cycle.”

In the midst of all these falling prices and record lows, Washington DC was the only city where home prices increased on both a monthly (+1.1%) and annual (+4.3%) basis. Seattle was up a modest 0.1% for the month, but still down 7.5% versus March 2010.

S&P/Case-Shiller reports data on both a seasonally adjusted and non-adjusted basis but recommends using the latter as being a more reliable indicator.  We have used only the non-adjusted data in compiling this summary.”

The good news for the Bay Area is we didn’t make the list this time.  Poor Las Vegas and Phoenix!  Are there two cities that have been hit harder???

I predict these will be the “HOT” Mortgages for the Werdmuller Group, of First Priority Financial, for the summer based on what I see…

FHA 203K – first and foremost – We have a great HUD consultant, as well as contactors, and realtors ready to write the deal.  This loan allows for construction costs to be built into the loan with Purchase or Refinance.

The Truth About the 203K Rehabilitation Loan in San Francisco

What’s the Difference Between a Full 203K and Streamline Mortgage in Alameda?

FHA 203B – This loan with the increase in FHA loan limits in 2008 has definitely helped the housing market and first time buyers trying to take advantage of the market.  Just 3.5% down up to $729.750.  Also, this will be a great option for those who foreclosed and short sold recently trying to get back into the market.

How to Purchase a Home One Day After a Short Sale 

Private Money – Cash is king – right now cash deal are 1/3^rd the market.  That means if you are a loan officer reading this,  you and I cannot compete on 1/3^rd of the market.  This is also truly astonishing!  However, we work with many investors and private money offering short terms, quick funding, and can blanket several flips with 1 loan allowing the all cash buyer to take out cash after purchase to buy more all cash properties.  We at the Werdmuller Group are currently working on financing 15 properties with 1 loan.

The VA LOAN – We have been posting extensive information on Va Financing because basically, if you are in the military it is WAY cheaper to buy than rent – also if you are at 100% Loan to Value, we can still put you in a refinance loan in the mid 4’s!

Details….

How to Purchase Home with a VA Loan in Alameda, CA

Approved Property Types and Loan Limits for VA Loans 

VA Loan Requirements and Eligibility in Alameda, CA

We are doing great things for our clients, our referral partners, our local market, our industry, and the National Economy on the local level, where it starts, contact us today for superior everything. 510.282.5456.

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Alameda, CA is a town with many beautiful Victorian and Craftsman style homes. Often an older home will come onto the market that has great potential but could use a little TLC. How can a homebuyer purchase one of these Alameda homes and afford the repairs? A 203K rehabilitation mortgage is just the thing!

Many clients and Realtors we know have questions about this type of loan, for example what is the difference between a 203K Streamline and Full 203k? Well in a nutshell, here are a few key points:

Key points of 203K Mortgages:

• Not just for repairs
• Dated homes
• Remodel kitchen or bathrooms
• Razed homes
• Foundation repairs
• Pool repairs up to $1500
• Mold or Lead based paint
• Termite damage (cannot include the inspection)

Streamline K

• Maximum repair amount of $35,000
• Streamline is for small projects that involve 1 or 2 specialized contractors
• Any HUD, bank owned or vacant home is not eligible regardless of dollar amount
• Would not have a HUD consultant

Full K

• No maximum repair amount
• HUD approved consultant is brought in to do the inspection
• Consultant prepares write up for project after meeting with borrower and discussing borrower’s wish list and the items that need to be done to bring the home to HUD’s minimum property standards
• Borrower uses write up from consultant to find general contractor’s to bid the project. 
• Accept bid from general contractor

This loan will take a little longer to close, depending on the scope of the work to be done. But what a reward to purchase a beautiful older Alameda home, get the repairs done and move into the home of your dreams!!

For more information on 203K Rehabilitation loans (Streamline K or Full K) contact the Werdmuller group! We are in contact with a local 203K consultant and contractor with experience doing these types of transactions, successfully!

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