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Monday Morning Mortgages>
Monday Morning Mortgages
June 22, 2009
California Housing Finance Agency (CalHFA) Returns
CalHFA down payment assistance has returned in a more diminished capacity. First time home buyers now have to contribute 3% from their own funds before borrowing a silent second of up to 3% that can be used for additional down payment or closing costs. Here are the details.
• borrower must bring in their own 3% of funds
• the 3% payment-deferred CHDAP assistance is borrowed to be paid back upon sale or refinance (rate at 3.25%)
• the first lien will be CalFHA at 5.5% today's rate, but I anticipate that going to 5.75% very soon
• maximum seller contributions for closing costs is 3% of sale price
• loan process takes 50 days
Foreclosure Moratorium Loopholes (Rob Chrisman, RPM, 6/15/09)
The California Mortgage Bankers Association reports that many companies may be exempt from the new 90-day foreclosure moratorium if they have an approved loan mod program in place. Many companies, whether they are Wells or Selene Finance, Chase or Vericrest, are DOC licensees that have applied so far. Once a company applies, they get a 30-day stay while the state reviews the application, then they decide whether the company gets a permanent exemption or is subject to the 90-day moratorium. Two have been given a permanent exemption already, rest are under review. It is best to check with the company servicing a particular loan, but some servicers are saying that it is business as usual since there are so many similarities between California’s law and regulations at the federal level, and many modification programs already in existence.
Jumbo Loan Guidelines (over $662,500 in Sonoma County)
• Maximum 45% backend DTI (total debt to income ratio).
• 75% maximum LTV.
• 700 minimum FICO (680 available with some restrictions).
• 6 months reserve requirement if second home or investment
ARMs Making a Comeback
Adjustable mortgages are making a return as the spread increases between the 30 year fixed and the 3/1 and 5/1 ARMs. Consumers’ appetites for ARMs are almost non-existent due to the damage of the readjusting, high margin ARMS that have done over the past 2 years. But taking emotion out of the equation, many buyers in today’s market will not be in there same home in 5 years and should consider an ARM. And we know we are in an upswing segment of the valuation cycle which would make an assumption of refinancing in 3 years sensible. The big risk is in future interest rates. Analysts expect rates to be well above current levels in 3 years, making it an uncertainty to refinance or even sell in the future. Check out a comparison at today’s rates with one loan point.
Conventional 30-yr fixed 5.5% 5/1 ARM 4.5%
Jumbo (over $662,500) 30-yr fixed 6.375% 3/1 ARM 4.5%
Loan Closing Turn times for Escrow Timing
Conventional Mortgage 35 days
FHA 35 days
Today's Rates
WITH ONE LOAN POINT
Conforming (<= $417,000)
30 Year 5.375%
5/1 ARM IO 4.5%
Jumbo Agency ($417,001 - $662,500 in Sonoma County)
30 Year 5.875 %
FHA Conforming (<= $417,000)
5.5%
FHA Jumbo (to $520,950)
5. 875%
Super Jumbo (<= $3 million)
30 year fixed 6.375%
3/1 ARM 4.5%
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