Wednesday, February 27, 2008

The Sky Is Not Falling! Why This Is The Time For Smart Buyers To buy!

Brentwood TN Real Estate

Everyday seems to bring more bad news for the Housing Industry. Lenders caught in the sub-prime melt down are closing their doors while banks and prime lenders are tightening loan requirements. Mortgage rates are rising and PMI (private mortgage insurance) showing industry wide narrowing of guidelines and options all contribute to the general "panic" atmosphere buyers perceive in the Brentwood TN Real Estate market as well as other areas.

Add to that increasing tax, foreclosures and sellers who have not yet seemed to see the light and you have one big roller coaster ride, complete with stomach dropping fluctuations in the stock and bond markets. The FED has slashed rates attempting to hold off a recession that some say is already here. Too little too late? Will it get worse from here?

Maybe so, but I think the bottom is much closer than buyers may guess.
Now is the time to buy, before interest rates rise substantially.
I foresee 3rd and 4th quarter rises as the market adjusts and evens out more.

The spring season is almost here, now is the time to take the plunge. There will not be a better time for months, possibly a year or more. With FHA and conforming loan limits being raised for 2008 and Fannie and Freddie speculated to not be offering these until June or so there will be a small window in which buyers can scoop these "treats" up.

Buyers educate yourselves on the "real" numbers and take a pass on the news headlines decrying doom and gloom for buyers in general. The media is in full panic monger mode and nothing sells like recession fear!

Look deeper, engage the services of knowledgeable and integrity bound lenders and Realtors. We are here to help clear away the fog of fear and show the very real opportunities for the smart buyer in the current market.

So buyers, take your fingers off the panic button,
pick up the phone, grab your mouse and keyboard
and start looking for the the facts in your area!

The sky is NOT falling!

Those who move now will be ahead of the pack come next year!

Vanessa Stalets
Brentwood TN Real Estate
RE/MAX Elite615-661-4400

Monday, February 25, 2008

Finance Market Update-Wk of February 25, 2008, Brentwood TN Real Estate

Brentwood TN Real Estate

Mortgage bond prices fell last week pushing mortgage interest rates higher. Stock strength the beginning of the week hurt mortgage bonds. Stronger than expected inflation data also pressured bonds. Inflation erodes the value of money received in the future. Bond investors require a higher rate of return as inflation rises. Fortunately bonds bounced back erasing some of the earlier losses towards the end of the week with some stock weakness Thursday afternoon and a significantly weak Philadelphia Fed survey. For the week, interest rates on government and conventional loans rose by 3/8 of a discount point.

The gross domestic product data Thursday will be the most important event this week. Producer price index, consumer confidence, durable goods, new home sales, income, outlays, and sentiment data also have the real potential to cause mortgage interest rate volatility.

Economic Factors

Economic Indicator Release Date Time Consensus Estimate Analysis
Existing Home Sales Monday, Feb. 25, 2008 Down 1.8% Low importance. An indication of mortgage credit demand. A significant decrease may lead to lower rates.
Producer Price Index Tuesday, Feb. 26, 2008 Up 0.4%, Core up 0.2% Important. An indication of inflationary pressures at the producer level. Lower figures may lead to lower rates.
Consumer Confidence Tuesday, Feb. 26, 2008 83.0 Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
Durable Goods Orders Wednesday, Feb. 27, 2008 Down 3.5% Important. An indication of the demand for "big ticket" items. Weakness may lead to lower rates.
New Home Sales Wednesday, Feb. 27, 2008 Down 0.6% Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
Preliminary Q4 GDP Thursday, Feb. 28, 2008 Up 0.7% Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
Personal Income and Outlays Friday, Feb. 29, 2008 Up 0.2%, Core up 0.2% Important. A measure of consumers' ability to spend. Weakness may lead to lower mortgage rates.
U of Michigan Consumer Sentiment Friday, Feb. 29, 2008 None Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.

Preliminary GDP

The Gross Domestic Product (GDP) is one the most important reports during any given quarter. GDP is a measure of US economic output and spending. The report is significant in that it provides investors, analysts, traders, and economists with a comprehensive report of the direction of the economy. In addition, it also influences the decisions of Federal Reserve policy makers, Congressional budget employees, and corporate financial planners.
GDP is the sum total of goods and services produced by the United States. The initial report is often based on incomplete data. Therefore, additional revisions are released over the following two months. There are often substantial differences between the initial release and the revisions. The mortgage-backed security market generally responds favorably to weaker GDP growth.
The preliminary fourth quarter gross domestic product data this week has the potential to move mortgage interest rates. A cautious approach is necessary to protect against market volatility*Information courtesy Tonya Esquibel, WR Starkey Mortgage, Franklin TN*

Vanessa Stalets
Brentwood TN Real Estate
RE/MAX Elite

Sunday, February 24, 2008

Major Private Mortgage Insurance Changes! Brentwood TN Real Estate

The following mortgage insurance companies have issued bulletins announcing a number of eligibility changes going into effect soon. United Guaranty: Effective March 10th the following changes will go into effect:
DU Expanded Approval Level I and LP Caution 500 Eligible loans with LTV > 95% will be ineligible
Pay Option ARM’s with potential negative amortization will be ineligible
Non Traditional Credit with LTV > 95% will be ineligible
ARMs with first rate adjustment less than 5 years max 95% LTV
Does not apply to loans receiving DU Approve/Eligible or LP Accept/Eligible
Limited Doc loans:
must have at least 50% of the qualifying income from self-employment. All non-self-employed income used for qualifying must be documented.
SIVA and SISA with LTV > 90% will be ineligible
SIVA minimum FICO 680 for 2 units
SISA minimum FICO 700 for 2 units
Cash out refinances will be ineligible
ARMs with first rate adjustment less than 5 years are ineligible
Limited documentation that does not require disclosure of income and/or assets is ineligible (i.e. No Ratio, NINA, No Doc)
AUS Doc waiver loans that meet the following are not subject to these policy changes:
Borrower is applying for full doc loan
Loan is underwritten by DU/LP and receives either an Approve/Eligible or Accept/Eligible
Findings do not require income and/or asset documentation
· Loans that do not use lowest score of all representative borrower scores are ineligible.
· Maximum of two loans insured per borrower, with only one insured per borrower of the following:
2nd home
Limited Doc
maximum LTV 95%
Minimum 680 FICO
2nd homes are not eligible
3-4 units are not eligible
These changes do not apply to loans receiving DU Approve/Eligible or LP Accept/Eligible
· A-minus:
Max 95% LTV for purchase and rate term refinance of 1 unit, primary residence
Minimum first rate adjustment of 3 years for ARMs
2nd home ineligible
NOO ineligible
3-4 units ineligible
These changes apply to all loans including DU Expanded Approval Level I, II or III, and LP Caution 500-Eligible
Effective March 31st, some rate fees will be increased including but not limited to:
Monthly ReadiRates
Selected adders for loans > 95.01% LTV
Limited Doc
A-minus monthly
RMIC: Effective March 21st the following changes will apply regardless of any Automated Underwriting System (AUS) decision or recommendation.
A Paper and A-Minus:
Loans with a FICO score below 620 will be ineligible.
Loans with a loan to value ratio (LTV/CLTV) over 95% and a representative FICO score below 680 will be ineligible.
Cash-out refinance loans with representative FICO scores below 680 will no longer be eligible.
Cash-out refinances will no longer be eligible.
A-Minus loans with representative FICO scores below 660 will no longer be eligible.
Declining Value:
In addition to loans which receive a declining value message from an automated underwriting system (AUS) such as Desktop Underwriter or loans on properties for which the appraisal indicates that property values in the subject neighborhood are "declining" being subject to Declining Value Policy guidelines and eligibility requirements, all properties in the states of AZ, CA, FL, MI, NV and OH must meet these requirements.
In addition to the maximum allowable LTV/CLTV on declining value properties requiring a five percent reduction from the LTV/CLTV otherwise allowed by RMIC's underwriting guidelines, the following guidelines and eligibility requirements will also apply:
A-Minus loans, Investment Properties, Cash-Out Refinances, and loans with Reduced Documentation on declining value properties are not eligible for RMIC coverage.
LPMIpreferred pricing will require a minimum representative FICO score of 720 on declining value properties.
Loans secured by condominiums determined to be of declining value will be limited to a maximum LTV of 90%, except where the LTV is limited to less than 90% by other factors
A Paper Monthlies/ZIP Monthlies base rates for loans with LTVs over 95% will be split into two segments: 95.01-97.00% and 97.01-100.00% LTV. Each of these LTV bands will be segmented by two FICO score ranges: 680-699 and 700+. The table below shows selected new A Paper premium rates.
30-Year Fixed Payment Purchase

Base LTV
FICO 700+
FICO 680-699
GE: Effective March 17th the following changes will go into effect:
Standard A Loans:
Loans with LTV > 95% and a credit score < 680 will be ineligible.
Loans with LTV < 95% and a credit score < 620 will be ineligible.
Cash out refinances with a credit score < 680 will be ineligible.
The 103% LTV product will no longer be available as a standard product.
A Minus Loans:
EA II, EA III, Refer w/ Caution, and Refer w/ Caution IV will be ineligible.
All A Minus loans with a credit score < 660 will be ineligible.
Cash out refinances will be ineligible.
Manufactured homes will be ineligible.
Nontraditional Credit or Unscoreable maximum LTV will be 95%.
Update to Declining/Distressed Markets Policy:
For properties located in Declining/Distressed markets (as indicated by Genworth’s Declining/Distressed Market Policy, the Appraisal, or Agency AUS indication) the following loan characteristics will be ineligible:
LTV/CLTV > 95%
A Minus
Alt A
Investment properties
Cash out
Interest only
Nontraditional credit
Condominiums with LTV >90%
As per Genworths Declining/Distressed Market List as of January 6, 2008, the following MSAs are considered Declining/Distressed:
19740 Denver-Aurora, CO Metropolitan Statistical Area Principal Cities: Denver, Aurora Adams County, Arapahoe County, Broomfield County*, Clear Creek County, Denver County, Douglas County, Elbert County, Gilpin County, Jefferson County, Park County
*Broomfield organized as a new county on November 15, 2001
and is coextensive with Broomfield city. For purposes of
defining metropolitan statistical areas, Broomfield city was
treated as if it were a county at the time of the 2000 census;
the standards were applied to data for Broomfield city.
24540 Greeley, CO Metropolitan Statistical Area Principal City: Greeley, Weld County

PMI: Effective March 21st the following changes will go into effect:
Loans with LTV and/or CLTV ratios of 97.01% and above, regardless of the automated underwriting system (AUS) decision, are not eligible
DU Expanded Approval Level I (EA I) AUS recommendations for LTV/CLTV ratios of 95.01% and above are not eligible.
Limited Documentation: at least 50% of the total qualifying income will need to come from non-salaried sources.
Distressed Markets:
5% LTV/CLTV reduction will be required from the maximum financing allowed for all loan products/programs, not to exceed 90% LTV/CLTV
Pay options ARMs and A-Minus (FICO scores 575-619) loans for properties in distressed markets are not eligible for mortgage insurance.
Distressed Markets are defined as (1) specific geographic areas where
property values are declining or are likely to decline; and (2) specific
geographic areas where property values are being influenced by
foreclosures and unemployment rates, among other factors.

This policy applies when the following indicators are present:
The appraisal report indicates declining values; or
A declining market message from an AUS system is received; or
A lenders independent research reveals that the subject property is located in a declining market; or
The subject property is located in an MSA/MSAD on the PMI Distressed Markets List
*Information courtesy Tonya Esquibel, WR Starkey Mortgage,Franklin Tn*
Stay tuned for updates.
Vanessa StaletsBrentwood TN Real Estate
RE/MAX Elite615-957-6333615-661-4400