The Fed's statement today does not augur well for Bay Area Mortgage Rates. The Fed's policy-setting committee stuck to a plan to end its purchases of mortgage securities by the end of March. Background - The program to purchase agency mortgage-backed securities (agency MBS) was announced by the Federal Reserve on November 25, 2008. On Wednesday, March 18, the FOMC announced the expansion of the Federal Reserve's program to purchase agency MBS up to $1.25 trillion by the end of the year. On September 23, 2009, the FOMC announced that the Federal Reserve…
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Tag: Refinance
Mortgage Rates go up sharply for Bay Area Homes
In last 3 weeks, 30 year fixed mortgage rates have gone up 34 basis points for San Francisco (SF) Bay Area homes. In the latest results of its Primary Mortgage Market Survey® Freddie Mac reported 30-year fixed-rate mortgage averaged 5.05 percent with an average 0.7 point for the week ending December 24, 2009. The 15-year Fixed Rate this week averaged 4.45 percent with an average 0.6 point. The 5-year adjustable-rate mortgage (ARM) averaged 4.40 percent this week. These rates are for conforming loan amount $417,000 and lower. Higher loan amounts come with higher…
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Existing Home Sales Jumps 10.1%
Home sales jumped in October, rising far more than expected as First Time Home Buyer Tax Credit offset fears about joblessness. Sales of existing homes increased by 10.1% to a 6.10 million annual rate from 5.54 million in September, the National Association of Realtors (NAR) said Monday. Total housing inventory at the end of October fell 3.7 percent to 3.57 million existing homes available for sale, which represents a 7.0-month supply at the current sales pace, down from an 8.0-month supply in September. The supply of homes on the market is now at…
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New changes to Conforming Loans for San Jose
Fannie Mae will change underwriting guidelines for conforming loans for San Jose and rest of the Bay Area. They are doing this to reduce their overall risk. Some of the changes announced recently and going into effect on the weekend of December 12, 2009 further tightens some of the guidelines. Here are the highlights: Credit Score: All Fannie Mae loans whether underwritten electronically or manually will now require a 620 credit score minimum. There are very few exceptions. Mortgage Insurance coverage: Borrowers loan-to-value exceed 80 percent of the property value now have a…
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FHA announces changes to Streamline Refinancing for San Jose Homes
In it's announcement on Friday, FHA tightened the credit standards for it's Streamline Refinancing Program. So if you currently have an FHA loan on a San Jose home and want to refinance into another FHA loan, you will be subjected to new parameters starting January 1, 2010. Below are the highlights per FHA mortgagee letter issued on 9/18/2009. A.Seasoning At the time of loan application, the borrower must have made at least 6 payments on the FHA-insured mortgage being refinanced. B.Payment History 1)For mortgages with less than a 12 months payment history, the…
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First HVCC, then MDIA & now DRASTIC changes to FHA Guidelines
Federal Housing Administration (FHA), which insures lenders against losses on home mortgages, announced a series of changes that will have far-reaching impact on the housing market of San Jose, the entire San Francisco Bay Area and rest of the country.
Background -
The agency confirmed that, as of Sept. 30, it would fall short of a legal requirement that it maintain supplementary reserves of 2% of the loans it insures. Those reserves supplement a fund that provides for projected claims over the next 30 years. The extra capital cushion last year was about 3%, down from 6.4% in 2007. Falling reserves are because of higher claims that the FHA has been subjected to in last couple of years. The higher claims has come because of more defaults/delinquency on FHA Insured mortgages.The FHA earlier reported that in July 7.8% of the single-family mortgages it insured were 90 days or more overdue or in the foreclosure process, up from 6.6% a year earlier. For the second quarter, about 8% of all home mortgages were 90 days or more past due or in foreclosure, according to a survey by the Mortgage Bankers Association.
To ensure that FHA rebuilds the cushion of 2% or higher, Commissioner David H. Stevens on Friday announced plans to implement a set of credit policy changes that will enhance the agency's risk management functions. Stevens also announced his intention to hire a Chief Risk Officer for the first time in the FHA's 75-year history.
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Commissioner Stevens said "To be clear, the fund's reserves are sufficient to cover our future losses, so the FHA will not require taxpayer assistance or new Congressional action. That said, given the size and scope of the FHA and its importance to today's market, these risk management and credit policy changes are important steps in strengthening the FHA fund, by ensuring that lenders have proper and sufficient protections."[rate-quote-middle-cta] Good News for First Time Buyers - Mr. Stevens said tighter credit standards would suffice to rebuild the cushion to 2% or more, and that the FHA wouldn't need to raise the premiums borrowers pay or seek an increase in its minimum down-payment requirement of 3.5%. (more…)
FHA Streamline Refinance for Bay Area Residents
How to get FHA to FHA refinance with no Appraisal, Income or Credit verification
If you live in the San Francisco Bay Area or rest of California state and if you currently have an FHA loan, you may be eligible for an FHA streamline refinance. This can help you lower your mortgage payment and mortgage rate. It could also help you move into a 30 year fixed loan from an Adjustable Rate Mortgage (ARM). And unlike a typical refinance, an FHA Streamline Loan doesn't require Appraisal, Income or Credit verification. This is arguably the easiest loan process out there.
So how do you qualify for and what are the requirements for an FHA Streamline Refinance?
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- Your current mortgage must be an FHA Loan. Else your options are limited to going through a standard refinance which requires Income, Asset, Credit verificationn and also an appraisal.
- Maximum Loan Amount is based on the lower of:
- Original Principal Balance, or
- The sum of existing mortgage balance (FHA Insured), Closing Cost, Pre-Paids to establish the impound account minus any up front mortgage insurance premium refund
Stated Income Jumbo Loans now available for Contra Costa, San Mateo & San Francisco counties
Great news for homeowners and buyers in Contra Costa, San Mateo and San Francisco counties. Stated Income loans are now available for borrowers in these counties. This type of loan could specially be very useful for Self-Employed borrowers who find it difficult to document their "real" income via Tax Returns. Also, commissioned employees who have wide swings in their income could benefit from a program like this.Below are the highlights of the program: MINIMUM Loan Amount $400,000 3 year and 5 year ARMs (Adjustable Rate Mortgages) only No maximum number of financed properties.…
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Low mortgage rates gone already for Bay Area?
And why you should rush to buy
Low mortgage rates are Going..Going...Gone for Bay Area!! FNMA-30 4.5% coupon went down again today - by a whopping 100 bips. Over last couple of weeks mortgage backed securities have been in a free fall, pushing the mortgage rates up - substantially. According to Freddie Mac 30-year fixed-rate mortgage (FRM) averaged 5.29 percent with an average 0.7 point for the week ending June 4, 2009, up from last week when it averaged 4.91 percent. 15 year fixed rate mortgages and 5 year adjustable rate mortgages moved up too. Note that these averages are for conforming loans under $417,000. The rates for conforming jumbos (loan amounts upto $729,750) and jumbos are higher than these averages.
Yields on long-term Treasury bonds have been rising despite the Fed's efforts to push them down by purchasing Treasury securities. The Fed wants Treasury yields lower because they are a benchmark for many other private-sector interest rates -- including rates on mortgages. Concerns about large federal deficits, are one cause of the unwanted rise in yields. The wider the deficits, the more the Treasury borrows and the higher rates go. Wider deficits also stir inflation fears, which also push Treasury yields up. (more…)
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