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Why is Mortgage Underwriting So Crazy?

Posted On: January 25th, 2012 by James Posted In: Financial Health • Government Actions • Mortgage Programs • Mortgage Rates • Mortgages • Refinancing

Why is the loan approval process so difficult these days? Well,  the answer is complicated. The truth is that the approval and funding process for a conforming, FHA, or VA, government insured mortgage has never been more complex since I’ve been in the business (since 2003). To get to the root of this issue we need to get into the way-back machine and go back to the year 2004.

This is the year of the ascendancy of the sub-prime mortgage industry. These companies realized that there was a HUGE appetite for AAA rated mortgage backed securities. So they began Continue Reading – Why is Mortgage Underwriting So Crazy?

Operation Twist = Mortgage Rate Bonanza

Posted On: September 22nd, 2011 by James Posted In: Government Actions • Mortgage Rates • Mortgages • Refinancing

Yesterday’s announcement from the Fed’s quarterly meeting was a major market mover–especially for mortgage rates.  Ben Bernanke announced the initiation of something called ‘operation twist’, which many market observers were prepared for, but my understanding is the tone of the announcement really made the bond market jump to levels never before seen, with the result being the lowest mortgage rates ever seen in the US.  I get some great information from a market analyst in the Chicago area named Doug Nardi, and I’m copying and re-posting his assessment for you, here: 

The Federal Reserve’s Operation Twist was everything it was cracked up to be, and even a bit more.  While the stock market was less than impressed with the central bank’s latest stimulus plan, the bond market was all for it. The Fed announced it would direct $400 billion from the sale of treasuries of three years and less in duration and invest it in those with maturities of 6 to 30 years. Continue Reading – Operation Twist = Mortgage Rate Bonanza

How Does the Debt Ceiling Affect Mortgage Rates?

Posted On: July 28th, 2011 by James Posted In: Financial Health • Government Actions • Mortgage Rates • Mortgages

This debate is unavoidable, so I won’t try to establish any context for this blog post.  I’ll just try to keep this very simple for those of you who are searching for some quick perspective on how this current debt ceiling debate might impact residential mortgage rates and fees.

***DISCLAIMER*** I am not an economist.  I have 9 years of mortgage lending experience and a Bachelors degree in communications from NC State University (Go Wolfpack).

Mortgage rates are directly derived from FNMA mortgage bond offerings.  This bond is sold just like any other bond, and competes with other municipal and corporate bond offerings.  The yield of this bond changes from day to day.  When the overall economy is “good,” this yield generally comes UP to attract Continue Reading – How Does the Debt Ceiling Affect Mortgage Rates?

Low Rates and the Return of Private Mortgage Insurance (PMI)

Posted On: May 17th, 2011 by James Posted In: Financial Health • Mortgage Insurance • Mortgage Programs • Mortgage Rates • Mortgages • Portland Real Estate • Refinancing

Its happening again.  Rates are tumbling and tumbling more.  I read recently that avoiding closing costs in a declining rate environment is a wise approach and I completely agree.  By avoiding closing costs two things happen:

1. The net benefit of the improved cash flow is immediately realized, and

2. You are in a position to refinance AGAIN as rates continue to slide.  Because you haven’t paid any of your equity there is not much downside.

I’ve been making loans since 2003, and rates have pretty much always been really attractive with a few exceptions (sorry purchasers of the summer of 2006!  I hope you’ve refinanced out of your 6.625% fixed). Continue Reading – Low Rates and the Return of Private Mortgage Insurance (PMI)

Potential Jumbo Refinancing Candidates

Posted On: January 28th, 2011 by James Posted In: Financial Health • Mortgage Programs • Mortgage Rates • Mortgages • Portland Real Estate • Refinancing

So, if you pay attention to this blog, you know that interest rates have popped up from their mind-boggling lows in early November.  Mortgage Refinances still make a ton of sense for many, but some are waiting for a return to the glory of those heady days… and I believe they will continue to wait for a long long time.  However, there are two types of borrowers that I believe will still benefit GREATLY  from a refinance:

 

  1. Those who tried to refinance and couldn’t qualify due to an appraisal issue.
  2. Those who currently have a Jumbo mortgage and think that Jumbo rates haven’t improved enough to warrant starting the process. Continue Reading – Potential Jumbo Refinancing Candidates