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Monday Morning Mortgages>
Monday Morning Mortgages
July 6, 2009
Monday Morning Mortgages is a brief week-opening report on mortgages in our area. This is a tool to assist my realty partners on loan trends, rates, program changes, and problem solutions.
California New Home Tax Credit Ends
The California Franchise Tax Board has turned off the $10,000 California New Construction Tax Credit after they reached the $100,000,000 maximum investment, as well as their maximum application status of 10,000. “The CA Franchise Tax Board did continue to accept additional applications – up to 12,000 total – to allow for duplications in faxes or for any home buyers that were not authorized for the tax credits, and to allow for any expected rejections. Both limits have been reached and applications for the California New Construction Tax Credit will no longer be accepted.” http://www.ftb.ca.gov/individuals/New_home_Credit.shtml
Condo Approvals per FNMA
Fannie Mae’s guidelines on condo lending require the condo project to be “substantially complete” and at least 70% of the units must have been conveyed or be under contract for purchase to owner occupied or second home buyers. At least 51% of ownership must be to owner occupied or as 2nd homes.
Saturdays Count in New HERA Mortgage Disclosures
Under the Housing and Economic Recovery Act of 2008 (HERA) Mortgage Disclosure Improvement Act, Saturdays are now considered a business day for purposes of disclosure receipt. Business days will include all calendar days except Sunday and legal federal public holidays.
Cancelling Mortgage Insurance
Since the passage of the Homeowners Protection Act of 1998, it is supposed to be easier to have mortgage insurance cancelled when equity ownership reaches 20%. If done automatically, when the amortized loan is paid down to 78%, (in about 10 years) the MI should automatically come off provided the borrowers are current on their mortgage payments.
Borrower requested removal of mortgage insurance would need:
• At least 12 months seasoning of making payments.
• All payments on time.
• Appraisal proof that mortgage balance is 80% of ORIGINAL PROPERTY VALUE. This mean, appreciation alone cannot be the increase in equity, but the borrower would have had to pay down the loan to 80% of original value at time of purchase.
• No additional liens on the property.
• Written request from borrower.
• Additional terms MAY apply depending on who owns the loan at time of requested removal of MI.
Rates
I was hoping the negative unemployment data of late last week would have rates opening this week lower. But instead, positive manufacturing data has given slight rise to stocks and rates are a slight bit up from last week. Except for the 5 year ARM, which is a great deal if buyers weren’t so nervous about ARMs. With interest rates expected to rise over the next few years, ARMs are only good if a borrower knows they will liquidate the property within the fixed ARM period.
Economic data is slow this week; but continued bond sales by the government that may affect rates. See below for today’s rates.
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 5.25%
5/1 ARM IO 4.5%
Jumbo Agency ($417,001 - $662,500 in Sonoma County)
30 Year 5.5 %
FHA Conforming (<= $417,000)
5.5%
FHA Jumbo (to $520,950)
5. 5%
Super Jumbo (<= $3 million)
30 year fixed 6.75%
3/1 ARM 4.00%
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