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11-30-11
Looks Like the New Fed's Refinance Program Still has a ways to go !
Details on how to apply for the federal government's expanded refinancing program, which could help thousands of Arizona homeowners underwater on their mortgages by lowering their monthly payments, won't be available until sometime in December, according to new information from a spokesman for the U.S. Department of Housing and Urban Affairs.
Borrowers must have mortgages held by government-owned Fannie Mae or Freddie Mac to qualify but few other details have been released, except that the program is supposed to allow many homeowners, no matter how underwater they are on their mortgages, to refinance to current lower interest rates.
Nearly 50 percent of Arizona homeowners are underwater.
HUD Secretary Shaun Donovan told The Arizona Republic in early November that the revamped Housing Affordable Refinancing Program, or HARP, had been crafted to help homeowners who were deeply underwater. Donovan said details would be unveiled on Nov. 15.
Earlier this week, HUD spokesman George Gonzalez said that the negotiations to allow the program to work, including deals with lenders, haven't been completed but that the expanded refinancing program should be ready for homeowners to start applying this month.
Donovan said an average Arizona homeowner could save $2,500 a year by refinancing through the new HARP.
Fannie and Freddie sent out some basic guidelines to lenders on the program last week.
Phoenix mortgage banker Jay Luber of Galaxy Lender said after checking that information, it appears as if the specific part of the program to help most homeowners in Arizona won't be available until March, but he said the guidelines seemed preliminary.
10-27-2011
Every Homeowner should know about the new HARP Refinance Program
So what do the new changes to the government’s Home Affordable Refinance Program (HARP) mean for you? If you’re an underwater homeowner, it could mean a lot.
In fact, it could be the thing that finally allows you to refinance your mortgage at some of those all-time low interest rates you’ve been hearing about, but couldn’t qualify for. Here’s a look at some of the key elements of the changes to the government-backed mortgage refinance program, announced Monday by the Federal Home Finance Agency (FHFA).
No loan-to-value restriction
The main thing is that you no longer have to worry about how far your home has fallen in value since you took out your mortgage. Previously, you couldn’t get a HARP refinance if your mortgage balance exceeded your home value by more than 25 percent. That limit has been totally eliminated, meaning you can still refinance even if your home value is a third of what you owe on your mortgage, or even less.
Appraisals, fees waived
The new rules waive certain fees charged at closing, particularly for borrowers who choose to refinance into 15- or 20-year fixed-rate mortgages. High closing costs have been seen as a barrier to refinancing under HARP, so the administration hopes that waiving these fees will enable more homeowners to refinance. Since home value is no longer an issue, appraisals are no longer required, as long a reliable automated estimate is available, though some lenders may still insist on one.
There will still be some fees associated with closing costs on the new loan, which can be financed as part of the new mortgage.
Fannie Mae, Freddie Mac mortgages only
The HARP underwater refinance is available only to borrowers who have mortgages backed by Fannie Mae or Freddie Mac. Since they’re already on the hook if the loans go bad, it’s in their interest to enable underwater borrowers to refinance so they’re less likely to default. It doesn’t really matter to them if the interest rate is reduced, since the interest is paid to the investors who buy the guaranteed loans from Fannie Mae or Freddie Mac. You can find out if yours is a Fannie Mae or Freddie Mac loan at the agencies’ web sites.
Who’s eligible?
To qualify for the new HARP refinance, you need to have been current on your mortgage payments for the last six months and been late no more than once in the past year. The mortgage must have been transferred to Fannie Mae or Freddie Mac no later than May 31, 2009. The mortgage must be on a one-to four unit dwelling that serves as your primary residence.
How much can I save?
Underwater borrowers refinancing through the program will save an average of $2,500 a year on their mortgage payments, or more than $200 a month, according to Shaun Donovan, Secretary of the Department of Housing and Urban Development. The government estimates the changes to the program will benefit up to 1 million people, although Moody’s Analytics puts the figure at 1.6 million. The Obama administration may be a bit cautious after their original estimates for borrowers helped by the current version of HARP and its companion HAMP loan modification program turned out to be too optimistic.
What kind of loans can I get?
This is a significant change from the current HARP. The administration is encouraging underwater borrowers to refinance into short-term 15- and 20-year fixed-rate mortgages by waiving most or all program fees for those loans. The current program mandates that borrowers refinance into 30-year fixed-rate mortgages only. Homeowners will still be able to refinance into 30-year loans if they wish, but they’ll have to pay more fees if they do. Combined with the ultra-low rates now available on 15-year mortgages, that’s a significant prod for borrowers who’ve been in their homes a number of years to shorten up their term and start building back more quickly toward positive equity.
When is it available?
Fannie Mae and Freddie Mac are scheduled to provide full details of the program, including information to lenders, by Nov. 15. The FHFA says some lenders may be able to start offering the program by Dec. 1, although most estimates are of a rollout in the first quarter of 2012 for most participating lenders. Chase Bank and mortgage lender Genworth have already indicated they look forward to participating.
Sounds great! What are the downsides?
Like the current HARP, the new version is voluntary, so not all lenders may participate. But if you have a Fannie Mae or Freddie Mac mortgage, you can refinance with a participating lender even if your current one is not in the program.
Because the program is voluntary, lenders may have their own requirements they overlay on top of the HARP guidelines, though there will likely be limits on what they can do. However, there will still likely be credit score and income requirements, the same as for any mortgage.
It’s also not yet clear how the new guidelines will address loan-level price adjustments, which are tacked onto the interest rate to reflect certain risk factors. Since being underwater in itself is considered a major risk factor, interest rates offered to homeowners under the current program have sometimes been considerably higher than they expected, even above what they are currently paying. But if seriously underwater borrowers are able to get near-market interest rates when refinancing, this could be a real bonanza for financially stable underwater homeowners.
From Kirk Haverkamp, Oct. 25, 2011
10-7-2011
Do you ever get dated info from sites like Zillow, Trulia etc ...?
I get agitated when people say they checked their home value on Zillow, because it is so out of date.
A real estate data-quality study released by online portal Trulia found that about 69 percent of errors in online real estate listings information were directly related to third-party syndication of information by non-multiple listing service sources.
The company reviewed about 1.2 million listings from about 250 data sources during the third quarter and found about 120,000 inaccuracies in listings information. More than half (51 percent) of those inaccurate listings had errors in price, 41 percent had status errors, and 8 percent had errors in both price and status.
"This study shows that online listing errors are reduced significantly when MLSs syndicate directly on behalf of their membership," according to a related infographic (see below) that the company released.
And a survey of 1,000 consumers and real estate professionals conducted for Trulia found that accuracy of real estate listings information is a top concern.
You won't have that problem on our site. All searches are directly from the Arizona MLS!
9-23-2011
Fed Announcement Drives Rates even Lower
When the Fed speaks, the markets listen. The Fed stated yesterday that there remains significant risks to the downside for the US economy (not sure why this announcement was such a shocker??). This immediately spooked the stock market and caused investors to move money out of stocks and into the safe haven of bonds. The Fed went on to say that they'd once again start buying long term mortgage bonds. Both of these factors increase the market demand for mortgage bonds. In order to meet this increased demand, the lending world in turn drops interest rates to create more mortgages which are then packaged and sold as mortgage bonds. You can see the results of these actions in the next section below.
Interest Rates as of 9/22/2011
Rates based on a 200k Primary Residence Purchase or no-cashout refi (unless description below says differently), 740+ Credit, assuming 0% loan origination fee and 0% in buydown "points" (you can also choose to pay "points" and get a lower interest rate). Please note, this information is intended for Real Estate Professionals.
96.5% FHA 30 Year Fixed = 3.75% (Requires MI)
75% 30 Year Fixed = 3.875%
80% 30 Year Fixed = 4%
95% 30 Year Fixed = 4% (Requires PMI)
97% 30 Year Fixed = 4.125% (Requires PMI)
125% Refi = 4.375% (No PMI, must be Fannie backed loan currently)
80% 15 Year Fixed = 3.375%
80% 10 Year Fixed = 3.25%
90% 2nd/Vacation Hm 30 Yr = 4% (Requires PMI)
80% Investment Property 30 Yr Fixed = 4.75%
75% Investment Property 30 Yr Fixed = 4.375%
100% USDA/Rural 30 Yr Fixed = 4.25% (No PMI required)
100% VA 30 Year Fixed = 3.75% (No PMI required)
This information came from Ryan Halvorsen at Smart Financial.
9-20-2011
"Learning the New Normal in Real Estate"
I grew up in the Valley since I was 9. I loved horses then & I still have a horse, now. I trained as a teacher but ended up in sales. For 13 years I traveled extensively as a representative in the cosmetic & fashion industry. How did I get into Real Estate? It just happened ... because my husband was in Real Estate. It wasn't until I started working more on my own that I realized that it 's not just about the money - it's about helping a client achieve their goals. Whether it is easing the difficulty of a seller going through a short sale and protecting them from deficiency issues or helping a first time home buyer through the maze of options & restrictions on their purchase. As with most endeavors, persistance pays off. The feeling of shared accomplishment with clients is wonderful.
I am really amazed at the changes that have taken place in Real Estate! I work hard to keep up with it all. I've taken 3 times the number of renewal classes required because I can't stand "not knowing what's going on"! I even went back to school & got a Multi-Media degree so I could keep up with the technology and know how to expose my seller's homes on every website & media that I can.
So I'm learning the new "Normal" in our current market place. First it was REOs (foreclosures), then Short sales, then HUD homes and now I am trained on doing Seller Financing with Carrybacks and Mortgage Wraps. I sure something else is coming soon & when it does I'll "have to know how it works"!
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