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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?

New HARP loan “HARP 2″ + new FHA loan limits 2011

Posted On: November 21st, 2011 by James Posted In: FHA Mortgage • Government Actions • Mortgage Programs • Mortgages • Refinancing

Christmas might be coming early for homeowners in Oregon and Washington!  The Obama administration has been putting pressure on banks to come up with ways to extend opportunities to refinance into lower rates in recent months, and it appears that we’re getting some movement on this finally.  The original HARP loan (aka: Home Affordable Refinance Program) has been around since early 2009, and allows homeowners to refinance their existing first mortgages into lower rates, EVEN if the value of the securing property has gone down dramatically.  The program allows you to borrow 125% of the appraised value of the home, but most major lenders only really allow for 105%. Continue Reading – New HARP loan “HARP 2″ + new FHA loan limits 2011

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

What To Do If You Are Underwater On Your House

Posted On: June 15th, 2011 by James Posted In: FHA Mortgage • Financial Health • Mortgages • Refinancing

Many of us are finding ourselves living in homes worth less than we paid to purchase them (myself included).  Some of us purchased with a down payment, to find that equity we started with evaporating at what seems to be an alarming and relentless clip.  Some of us purchased with little or no money down and feel stuck in a home that cannot be sold for what is owed on it.  These are troubling times for the recent home owner – and many of us need more than a mortgage 101.  But I’m here with a message of hope.  I recently met with a young woman who purchased a home with zero down in 2007 for $225,000.00 and bought with a fixed rate INTEREST ONLY product (meaning: she still owes $225 against it).  She wanted to see what a refinance would look like for her.  I told her to Continue Reading – What To Do If You Are Underwater On Your House

FHA Streamline: How to Qualify

Posted On: June 4th, 2011 by James Posted In: FHA Mortgage • Financial Health • Government Actions • Mortgages • Refinancing

FHA streamline: more difficult to qualify for than it seemsI should have subtitled this post: “Why you might NOT Qualify”

The FHA mortgage continues to be one of the most popular mortgages in Portland.  The reason for this is undoubtedly its FLEXIBILITY.  The FHA loan is the easiest to qualify for, requires the least amount of cash, has the lowest credit requirements, allows for gift funds on the down payment, allows for non-occupying co-borrowers to fully count towards the DTI, the list goes on.  But once you’ve GOT the FHA loan in place, the flexibility continues!

For one, the FHA loan is always “Assumable”.  This means that when you want to sell your home, you can also offer your mortgage to be assumed by the buyer (provided they qualify with the lender, etc).  Imagine how much value that might have in 5 or 10 years when rates are at 7%… or maybe the 30 year fixed mortgage won’t even EXIST in a decade?!   Continue Reading – FHA Streamline: How to Qualify