Friday, January 27, 2012

How To Get Rid Of Your FHA Mortgage Insurance

As compared to conforming loans and jumbo mortgages, FHA-backed loans are great for a lot of reasons.
FHA mortgages allow purchases with low downpayments; they allow refinances without appraisal; and FHA mortgage rates are often pretty low.
One place where FHA mortgages fall short as compared to other loan types, however, is with respect to mortgage insurance. FHA mortgage insurance can be cumbersome and costly.
If you're going to take an FHA-backed mortgage, you need to know how FHA mortgage insurance works.
Click here for an FHA mortgage rate quote.

With FHA, Everyone Pays Mortgage Insurance Twice

The FHA's role in Mortgage World is different from Fannie Mae and Freddie Mac. The FHA doesn't "buy mortgages" from banks like Fannie and Freddie do. Rather, it insures them.

It works like this : The FHA issues mortgage guidelines to which banks can underwrite a mortgage. These mortgages are commonly called "FHA mortgages".
If a bank underwrites an FHA mortgage and the loan goes into default, the FHA repays the bank's losses from its capital reserves. The FHA's capital reserves are funded by mortgage insurance premiums paid by the nation's FHA-insured homeowners.

FHA homeowners pay two types of mortgage insurance -- Upfront Mortgage Insurance Premiums and Annual Mortgage Insurance Premiums. These insurance types are sometimes abbreviated and known as UFMIP and MIP, respectively.
Since April 18, 2011, every FHA-insured homeowners has been required to pay both forms of FHA mortgage insurance.
Click here for an FHA mortgage rate quote.

How To Calculate Your FHA Mortgage Insurance

The FHA's mortgage insurance requirements are generally simple.
FHA Upfront Mortgage Insurance Premiums
The FHA's current upfront mortgage insurance premium (UFMIP) is 1 percent of your loan size. For example, if you want to apply for an FHA purchase mortgage and your loan size is $300,000, then your Upfront MIP will be equal to $3,000.
Upfront MIP is not paid as cash. It's automatically added to your loan balance by the FHA. Therefore, your final loan size in the example above will be $303,000.

Furthermore, upfront MIP is not used in your FHA loan-to-value calculation. This means that you can make a 3.5% downpayment on your purchase, add the 1 percent UFMIP to your loan size, and still meet the FHA's low downpayment guidelines.
Upfront MIP is paid to the FHA upfront, at closing, and never paid again. Hence the name, "upfront" MIP. However, because UFMIP is added to your loan balance, you do pay mortgage interest on it for the life of your loan.

FHA Annual Mortgage Insurance Premiums
The FHA's other type of mortgage insurance is paid monthly. Called Annual Mortgage Insurance Premiums (MIP), it's paid as a part of your mortgage statement.
Annual MIP is required on all FHA mortgages and premiums vary according to your FHA loan's individual characteristics. The FHA's MIP table is below :
  • 15-year loan terms with loan-to-value over 90% : 0.50 percent annual MIP
  • 15-year loan terms with loan-t0-value under 90% : 0.25 percent annual MIP
  • 30-year loan terms with loan-to-value over 95% : 1.15 percent annual MIP
  • 30-year loan terms with loan-to-value under 95% : 1.10 percent annual MIP
As a real-life example, a 30-year fixed rate FHA mortgage in a high-cost area such as Loudoun County, Virginia; or Bethesda, Maryland may be for as much as $729,750. If the FHA mortgage is a purchase and the buyer is putting the minimum 3.5% down on the home, the annual MIP is 1.15 percent, or $699 per month.
On a 15-year mortgage, the MIP falls to $304 per month.
Click here for an FHA mortgage rate quote.

How To Get Rid Of Your FHA Mortgage Insurance

One nice thing about FHA mortgage insurance is that it's not permanent. FHA mortgage insurance eventually goes away.
The schedule for getting rid of FHA mortgage insurance changes by loan term.
  • 30-year loan term : Annual MIP is automatically canceled once the loan reaches 78% loan-to-value and monthly MIP has been paid for at least 60 months.
  • 15-year loan term : Annual MIP is automatically canceled once the loan reaches 78% loan-to-value. There is no requirement that monthly MIP be paid for at least 60 months.
In other words, if you have a 30-year fixed rate FHA mortgage, you must pay mortgage insurance for at least 5 years before it can go away -- regardless of your loan balance. By comparison, if you have a 15-year fixed-rate FHA mortgage, your mortgage insurance is removed as soon as your LTV is low enough.
No action is needed on your part -- the FHA handles MIP removal automatically.
Also, note that the FHA does not allow a new appraisal to determine whether your loan is at 78% loan-to-value. The 78% LTV is based on the lesser of your purchase price, or its original appraised value.
At today's mortgage rates, a 15-year FHA mortgage on which the minimum 3.5% downpayment was made should pay down to 78% of the original purchase price within 26 months. A 30-year fixed will take 9 years to reach the same point.
Click here for an FHA mortgage rate quote.

FHA Mortgage Rates And MIP

FHA mortgage rates are cheap right now; cheaper than conventional loans and cheaper than VA. There are great bargains for first-time buyers and other households planning on minimum downpayments.
The trick is understanding FHA mortgage insurance. FHA mortgage insurance can be costly in the long run and there's good cause for comparing options.

Before you lock a 30-year fixed FHA loan, do your due diligence -- look at 15-year payments, too. 15-year FHA mortgage rates are often lower than comparable 30-year FHA mortgage rates and the mortgage insurance terms are more favorable.
You'll pay less MIP each month, and can be rid of it as much as 7 years sooner.
Click here for an FHA mortgage rate quote.

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.
First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713

Visit First Capital Online or call: 310-458-0010

Thursday, January 26, 2012

Obama’s Mortgage Plan Announcement Disappoints

President Barack Obama announced during his State of the Union address that struggling homeowners would be able to save $3,000 a year through a new refinancing plan paid for by a fee levied on banks.

The president said this bank tax would act as a way for banks to repay the debt they owe to taxpayers for being bailed out, but analysts say the proposal will never be passed by Republicans who oppose a bank tax and government intervention in general. Also of concern to analysts was the announcement of a new investigation unit that will continue to scrutinize lending practices, which is expected to put more pressure on banks that may be shifted to borrowers in the form of higher lending costs. For more on this continue reading the following article from TheStreet.

President Obama in his State of the Union address on Tuesday proposed a plan that would allow every "responsible homeowner" a chance to save $3,000 a year on their mortgage by refinancing at historically low interest rates.

The President did not elaborate on the details of the plan except to say that a "small fee" on the largest financial institutions will help fund the plan and "give banks that were rescued by taxpayers a chance to repay a deficit of trust."

According to a New York Times report, the new plan will be directed at borrowers whose mortgage exceeds the value of their homes . The report quotes a senior administration official who says the program could benefit 2 to 3 million homeowners with mortgages not guaranteed by the government and will cost no more than $10 billion.

"This sounds an awful lot like the FHA short-refi program announced in 2010 that is 1,499,500 short of its 1.5mm goal," tweeted Neil Barofsky, former inspector general for TARP and a senior fellow at NYU School of Law.

Analysts reacting to the announcement are also calling the plan "dead on arrival."
FBR Capital analyst Edward Mills said in a note Wednesday morning that the plan was unlikely to get congressional approval, "as Congressional Republicans are opposed to additional intervention in the mortgage market and are philosophically opposed to a bank tax."

KBW analysts believe the plan might look something like an extension of the current HARP plan to include private mortgages. Still, they too seem to doubt the likelihood of the plan getting approval and called the proposal to pay for refinancing package with a bank tax a "poison pill."
Meanwhile, the analysts seemed more concerned about the creation of a mortgage investigation unit in the Justice Department as the more significant development for banks.

The announcement comes at a time when banks and states are working towards a settlement on faulty foreclosure practices. Banks have been seeking a broad release from future claims from states in exchange for making reductions to principals on loans. But New York Attorney General Eric Schniderman and California AG Kamal Harris are among those who have insisted that they have the flexibility to continue investigating claims against banks mortgage practices.

"While investors had been expecting some good news in the form of a mortgage settlement and the ability to put the issue in the past, this announcement suggests that investigations into banks' practices related to securitizing residential mortgages is unlikely to end any time soon, " KBW analysts wrote.

The SPDR Select Sector Financials ETF was down 0.6% Wednesday morning. Bank of America, JPMorgan Chase, Wells Fargo and Citigroup, who are engaged in mortgage settlement negotiations, all saw their shares dip by more than 1% in early trading.
This article was reposted from TheStreet.

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.
First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713

Visit First Capital Online or call: 310-458-0010

Mortgage Rates for 30-Year Loans Increase to 3.98% From Record Low 3.88

Rates for U.S. 30-year mortgages climbed from the lowest level on record after Federal Reserve officials pledged to keep their benchmark interest rate near zero through at least late 2014 to help bolster the economy.

The average rate for a 30-year fixed loan rose to 3.98 percent in the week ended today from 3.88 percent, the lowest in records dating to 1971, Freddie Mac said in a statement. The average 15-year rate increased to 3.24 percent from 3.17 percent, according to the McLean, at a Virginia-based mortgage finance company.

The 30-year rate has been below 4 percent for eight straight weeks. The Fed yesterday extended its previous plan to keep rates low at least until the middle of 2013 as more than two years of economic growth have failed to push unemployment below 8.5 percent. Low borrowing costs are helping support the housing market, which has been hurt by the high jobless rate and foreclosures that depress values and erode buyer confidence.

Mortgage rates are very, very low and housing is very affordable,” Celia Chen, housing economist at Moody’s Analytics in West Chester, Pennsylvania, said in a telephone interview before the data were issued. “The distressed sales are still a weight on the market.”
Sales (ETSLTOTL) of previously owned homes rose 5 percent in December from the previous month to the highest level since January 2011, the National Association of Realtors said last week. Distressed properties -- comprising foreclosures and short sales, where the price is less than the mortgage balance -- accounted for almost a third of all purchases.

The number of Americans signing contracts to buy existing houses fell 3.5 percent last month after a 7.3 percent gain in November, figures from the Realtors showed yesterday.

Home-loan applications decreased in the period ended Jan. 20 after jumping 23 percent in the prior week, according to the Mortgage Bankers Association. The measure of purchase loans dropped 5.4 percent, while the refinancing index fell 5.2 percent, the Washington-based group said yesterday.
To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net
To contact the editor responsible for this story: Daniel Taub at dtaub@bloomberg.net
The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.
First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713

Visit First Capital Online or call: 310-458-0010

Wednesday, January 25, 2012

Home Sales Are Up, but Prices Are Down

According to data from the California Association of Realtors® (C.A.R.) California home sales rose for the third consecutive month in December. Sales also went up from a year ago, marking the sixth consecutive annual increase.

However, the price went down in both San Mateo County and San Francisco County in December (please see the second chart below).
Nonetheless, inventory is still tight, with inventory level around two months in Redwood City. (in a normal market, there is usually six to seven months of inventory).
No. of listings118
No. of REOs (real estate owned, by a bank, government agency, etc.)5
No. of short sales27
No. of regular sales86
No. of new listings last week15
No. of listings has price increase last week1
No. of listings has price decrease last week8
No. of listings become pending last week13
No. of property sold last week11
Inventory level2.16 months
December 2011 County Sales and Price Activity
(Regional and condo sales data not seasonally adjusted)

Dec-11 Median Price of Existing Single-Family Homes Sales
State/
Region/
County
Dec.
2011
Nov.
2011
Dec.
2010
MTM%
Chg
YTY%
Chg
MTM%
Chg
YTY%
Chg
California
Single-
family
(SAAR)
$285,920$280,960$304,7701.80%-6.20%3.30%0.10%
California
Condo/
Townhomes
$225,270$224,720$240,9700.20%-6.50%13.80%1.50%
San
Francisco
Bay Area
$455,750$467,680$495,520-2.60%-8.00%6.30%-1.40%
San
Mateo County
$595,000$735,000$699,500-19.00%-14.90%2.80%-9.70%
Homeowners whose primary residence was forclosed between 2009 and 2010 and believed they were financially harmed during the process can request an independent review and potentially received financial compensation. For details, please go to http://www.independentforeclosurereview.com/
Homes sold this week (data source from MLS Listings Inc. and the San Mateo County Recorder's Office):



AddressClosing Sale PriceBedsBaths (F|P)Estimated Square Footage
43 COVE LANE$291,00011|0820
405 CORK HARBOUR CIRCLE,#F$405,00022|01,136
6 SAINT MARYS PLACE$475,00021|01,060
234 ORCHARD AVENUE$550,00011|0500
104 INNER CIRCLE$550,00021|0957
234 C STREET$598,00032|01,424
557 QUARTZ STREET$641,00021|01,070
952 JUNIPERO AVENUE$679,80032|01,280
170 CERRITO AVENUE$775,00032|01,782
460 KING STREET$890,00042|02,280
32 DOCKSIDE CIRCLE$945,00043|02,600
Note: These statistics are generated using information from the MLSListings Inc. multiple listing service, but have not been verified and are not guaranteed. MLSListings Inc. disclaims any responsibility for the accuracy and reliability of these statistics. This information should not be relied upon for real estate transaction decisions. Neither Patch.com nor MLS Listings Inc. guarantees the completeness or accuracy of the information.
The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.
First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713

Visit First Capital Online or call: 310-458-0010



Do you think the number of homes sold reflects the health of a real estate market?
Tell us in the comments.

5 Ways To Improve Your Real Estate Business in 2012

by on January 20, 2012
Watching the ball drop this year in Times Square on New Year’s Eve, I was initially struck by the oddity of it all. Since 1907, hundreds of thousands of people have traveled from all over the world to be squashed together on a freezing December night in New York for the sole purpose of simultaneously counting backwards in an increasing frenzy, only to erupt in celebration upon completion of their task.

Even without Lady Gaga and Mayor Bloomberg locking lips, it is a strange sight to behold. But upon further reflection there is beauty contained in the chaos that few stop to fully appreciate: the universal appeal of rebirth. A new year is a new chance, a fresh start, a clean slate. This explains the most common of occurrences in the wake of New Year’s Eve: the dreaded New Year’s resolution. Most are made with honorable intentions, only to succumb to a lack of will power or a reversion to previous behavior. But all hope is not lost.

Recently Time Magazine published a list of “Tricks To Make Your New Year’s Resolution Stick”.
And while they were probably written to keep people motivated to hit the gym or stop smoking, there are tremendous applications to real estate business as well.
  1. Limit Your Promises: It’s tempting to make a laundry list of everything you would like to change in your business: reach out to past clients, prospect for new ones, focus on expired listings, go door-knocking, etc. But since Rome wasn’t built in a day, it’s best to focus on one or two items that seem the most in reach, which will not only increase your chance for success, but will embolden you to tackle the other items on your list next year.
  2. Write Them Out: In the fluid world of real estate, where deals can be reached, lost and then saved again in a matter of minutes, it’s all too-easy to get caught up in the minutia of the day’s work and lose sight of long-term goals. Writing down your resolutions acts as an anchor in this crazy sea and gives you a conclusion as to how you want the story you are writing every day to end.
  3. Involve a Friend: Whether it’s helping to help alleviate some of your workload, serving as a check on accountability of your goals or even providing an outside perspective, co-workers can be a tremendously rich resource. At Partners Trust, we are fortunate to be surrounded by the best in the business, giving us an unparalleled resource at our disposal to serve our clients.
  4. Get Out Of Your Own Way: For my money, this is the most important point. There are 1,000 reasons why something may not work. An offer you submit may be rejected because the price may be too low. Another agent with a perceived advantage may be going after the same listing that you are. No matter the situation, the greatest enemy in any business is doubt. Sometimes that doubt is born out of inexperience, and other times it’s born out of having seen too much. If we tried only what we knew was going to work 100% of the time, or even 50% of the time, we would be in state of paralysis. So cast aside all reasons why something won’t happen and focus on the reasons why it could. And remember that if you don’t try, it’s 100% guaranteed to never happen.
  5. Expect Missteps: This is almost as important #4. None of us are perfect, fewer even still when trying to alter established routines. If your resolution is to make 100 calls a week to past clients and you miss a week or two, that doesn’t mean you should abandon ship completely. It just means you either need to adjust your goal or manage your time more efficiently. Remember that the goal itself is worthwhile. Aim for the stars and if you only manage to hit the moon, you’re doing very well.
With that in mind, we at First Capital - New Homes Group -Partners Trust
would like to wish our clients and co-workers an incredible 2012.
May all your New Year’s Resolutions come true!

Do you have a New Year’s Resolution You Are Looking to Keep? How do you plan on sticking to it?  Please share your ideas and leave your comments below.

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.

First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713

Visit First Capital Online or call: 310-458-0010

Friday, January 20, 2012

2012 Essential Home Buying Tips • Advice • Trends

These times won't last forever

Thinking of buying a home? Don't take too long. There is no question this is still a buyers' market, but you'll find with a wave of investors in search of good deals, the bargain homes are selling at a much quicker pace. The low prices and low mortgage rates won't disappear overnight, but they won't last forever.

"This is one of those times that, 10 years from now, people are going to look back and say, 'If I only had made the decision,'" says Shaun White, a vice president for the RE/MAX real estate network.
And for those who have been waiting to refinance their mortgages but couldn't because their home values have tumbled, your chance to take advantage of historically low rates should be here soon -- if all goes as planned.
Here are some of the housing and mortgage trends you can expect to see in the first quarter of 2012.

Home prices begin to stabilize
If you have been waiting for the market to reach bottom to buy a house, the wait is over in many parts of the country.
"I think we've bottomed out," says Steve Anderson, a broker and owner at RE/MAX Benchmark Realty in Las Vegas. "If anyone wanted to buy a home today, now would be the time."
Anderson says even in foreclosure-plagued Las Vegas, homes priced according to the market have been selling quickly.

Home prices remain lower than about a year ago, but many housing experts say there's not much room for prices to fall further. Nationally, the median home price of existing homes was 3.5 percent lower in November 2011 compared to the previous year, according to the National Association of Realtors, or NAR.

While prices in some areas have taken bigger hits, and it's possible they'll decrease slightly in coming months, waiting to purchase may not pay off, some experts say. That's because if mortgage rates rise, the slightly better prices will not be enough to offset the higher mortgage costs, says White.
"We are either at the bottom or very close to it," White says.

HARP could lead to refi surge
Underwater borrowers, or those who owe more on their mortgages than their houses are worth, have anxiously awaited the day when they will be able to benefit from these historically low rates. That day is near.

The revamped Home Affordable Refinance Program, or HARP 2.0 that was announced in November 2011, allows borrowers to refinance and grab a lower mortgage rate regardless of how deeply underwater they are. The previous version of HARP did not allow refinances for borrowers who owed more than 125 percent of the value of their homes.

Despite the recent changes, most lenders have not been offering refinances under the new guidelines yet, as of early 2012. Industry experts say lenders are still making internal changes and are waiting for Fannie Mae and Freddie Mac to update their automated underwriting systems. The updates should take place by February or March, they say.
And if all goes as planned and lenders embrace the program, "there will be more refinance volume than lenders can handle," says Dan Green, a loan officer at Waterstone Mortgage in Cincinnati.
"Early interest in the HARP program foretells that HARP will be a bigger hit than anyone's imagined," he says. "There are three years of pent-up demand for a product like this."
But some are skeptical because the guidelines are optional and lenders can choose to implement their own "overlays," or restrictive rules.
"I'm cautiously optimistic," says Ed Conarchy of Cherry Creek Mortgage Co. in Gurnee, Ill. "But if lenders are reluctant to do it, I'm not sure it's going to help."

Mortgage rates likely to remain low
Thanks to the Fed and at the expense of the slow economy, mortgage rates are expected to stay near record lows for at least the first two or three months of the year.
"All indicate interest rates will remain stable for the foreseeable future given what the Fed has done and the nature of the U.S. economy," says Jason Auerbach, division manager of First Choice Loan Services in New York City.

The Mortgage Bankers Association estimates the average 30-year fixed rate will hover around 4.1 percent during the first half of the year, giving buyers and homeowners some extra time to take advantage of the historic rates.
"This is unbelievable," White says. "People who are in the profession have never seen rates this low."
But the caveat applies: Rates are unpredictable and can change at any moment without warning, Auerbach says. That means buyers and homeowners who want to refinance and are able to do so now shouldn't take a chance by waiting.
"There are a lot of buyers thinking rates are going to be the same for a long time, so they are in no hurry to buy," White says. "When rates move up, you'll see those folks get off the fence."

Investors, foreign buyers flock to the market
If you plan to buy a house, be ready to compete with local and foreign investors.
On average, 1 in 5 homes sold in 2011 was purchased by an investor, according to the National Association of Realtors. Many of these investors are foreign buyers who want to take advantage of the low prices and the weak dollar.

Buyers from Canada, Mexico, the United Kingdom, China, Brazil and other parts of the world have been actively purchasing vacation and investment properties in the United States, and this trend is expected to grow in 2012, White says.

"You will continue to see a lot of interest from foreign buyers," he says. "With the uncertainty that you see in economies around the world, they view (real estate in the United States) as a safe investment, and there is a large portion of the foreign buyers paying in cash."
Cash purchases account for about 30 percent of all homes sales in the United States, according to the NAR. In hard-hit areas, such as Miami and Las Vegas, cash purchases account for about half of sales.

Foreclosures and short sales moving quickly
Many buyers refuse to even consider purchasing a short sale because of the horror stories they have heard about lenders taking more than a year to approve a deal. Those buyers may want to reconsider this option in 2012. The short-sale process has improved and now happens more quickly, for the most part.

Frustrating, long waits still exist for some short sales, but many buyers are closing short-sale purchases in less than 90 days, agents say.

"Short sales are starting to move much quicker," Anderson says. "Everything is starting to get more streamlined. Those that work for the banks are better trained, and the banks more accepting."


Bank-owned properties also are selling faster. If you are eyeing a foreclosed house, don't expect it to stay on the market for long. Real estate agents who specialized in distressed properties say reasonably priced bank-owned houses often get multiple offers and go under contract for sale in days now instead of months.

Despite the high volume of foreclosures, Anderson says because these properties are selling quickly, "Supply is getting low and the demand is high." And, believe it or not, many of these properties are selling for more than the asking price.
"We are getting multiple offers on them," he says.

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.
First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713

Visit First Capital Online or call: 310-458-0010

Thursday, January 19, 2012

Lenders See Positive Indicators for Market Growth

Those in the real estate business have taken that deep breath as the first weeks of the new year have gone, by wondering “is this it? Is this the year things change and start going in the right direction?”.

My business as a local mortgage broker usually doesn’t start to kick in until the beginning of February as most clients are really slow to move in January. However, this is the first year in a long time that the trend has been broken. My phone has not stopped ringing. Buyers want to buy and they want to buy now.

Why the change and excitement?
  1. We are starting to see a trend of more jobs being created. The first thing that many people read every week is the unemployment reports. This is a mental thing that really effects people making those big decisions in life like buying a house. I know every time I hear the unemployment rate has gone up, I truly hesitate in making any big purchases. Alternately, seeing job growth encourages people.

  2. Interest rates are crazy low. The thing that is different about the rates from last year is that jumbo lenders are now starting to lower their rates a lot.  Why is this important? Jumbo lenders lend their own money. They are not selling your loan to get their investment back right away as a traditional loan sold to Fannie Mae or Freddie Mac would. They are lending you their money so when they give you a loan for $4,000,000, it’s their money and it’s now on their books. Not a lot has changed in the money markets from last year, but these jumbo lenders have lowered their rates a full 1% from last year. Why? Confidence – good old confidence.

  3. The appraisal report data shows a stable market trend. A year ago 4 out of 5 appraisals were done and the appraiser notated the market as a declining market still. Since the last quarter of 2011 that has reversed. Now every 4 out of 5 appraisals are in a stable market. These are real numbers baby. The data shows the values have now became stable.

  4. Jumbo lender guidelines are loosening up. Our two top jumbo lenders have given us more loose guidelines to help clients qualify for a home. One that stands out is using a co-signer to qualify for a loan. Only 3 months ago this wasn’t an option. So now if you need your parents help to buy that $2,000,000 house we can use them.
I truly believe this is the year that the market will stabilize and we will start to see the forbidden word again – appreciation. Yes, appreciation.

We would love to hear your opinion on the market and my thoughts.  Am I crazy to predict appreciation? Let me know. by on January 19, 2012

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.
First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713

Visit First Capital Online or call: 310-458-0010

Will credit card rate cut request hurt score?

QuestionDear Credit Card Adviser,
If I ask my credit card companies to lower my interest rates, will it affect my credit score?
-- Shane

AnswerDear Shane,
Asking your credit card issuer for a lower interest rate may affect your credit score in
some cases.

Such a request could prompt the credit card provider to review the customer's credit history as part of their approval process, Rod Griffin, spokesman for Experian, one of the three major credit-reporting agencies, says in an email.

"That could result in a hard inquiry, which could have a small negative impact on credit scores," he says. Hard inquiries, the type of credit check that can affect your credit score, remain on your credit report for two years, but only factor into the credit score for the first year.

The request might not necessarily trigger a hard inquiry, according to the credit card issuers that responded to my request for information. Representatives of American Express and JPMorgan Chase & Co. told me a rate reduction request from a customer would not generate a hard inquiry, while Bank of America said a hard inquiry might be necessary if more information was necessary to qualify a consumer for a lower rate.

Either way, a temporary dip in a credit score resulting from a single inquiry might be worthwhile -- unless you're in the market for a loan and have a borderline credit score -- if the reduced interest rate helps you pay down credit card debt.

Not that a rate reduction is a given if you ask for it.
Besides your credit profile, your credit card provider may consider your level of spending and payment history on the account. The issuer reserves the right to deny your request or even make a change to your account based on its review.

If you haven't looked at your credit reports recently, I'd suggest doing so to ensure they don't contain any inaccuracies that could alarm your card issuers, such as recent delinquencies. Under federal law, you can request free copies of your credit reports once every 12 months.


To some extent under the federal law known as the Credit Card Accountability, Responsibility and Disclosure Act of 2009, issuers must re-evaluate rate increases. The law requires issuers that imposed rate increases on or after Jan. 1, 2009, to reassess those increases every six months and reduce the rate if appropriate within 45 days of completing the evaluation. If the rate increase was triggered by a delinquency of 60 days or more, it must be terminated if the consumer makes at least the minimum payment on time for the next six months.

 

In short, the request may affect your score in some cases, but more importantly, the card issuer may look at multiple factors -- not just your credit history -- to make its decision. Make sure you know where you stand, so you can negotiate from a position of strength.  By Leslie McFadden


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The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.
First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713

Visit First Capital Online or call: 310-458-0010

Rate on 30-year mortgage down to record 3.88 pct.

WASHINGTON (AP) — The average rate on the 30-year fixed mortgage fell again this week to a record low. The eighth record low in a year is attracting few takers because most who can afford to buy or refinance have already done so.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year fixed mortgage dipped to 3.88 percent this week, down from the old record of 3.89 percent one week ago.

The average on the 15-year fixed mortgage ticked up to 3.17 percent from 3.16 percent, which was also a record low. Records for mortgage rates date back to the 1950s.

Mortgage rates tend to track the yield on the 10-year Treasury note, which fell below 1.9 percent this week.
For the past three months, the 30-year fixed mortgage rate has hovered near 4 percent. Yet cheap rates on the most popular mortgage option have done little to boost home sales.

High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don't want to sink money into a home that they fear could lose value over the next few years.
Previously occupied homes are selling just slightly ahead of 2010's dismal pace. New-home sales in 2011 will almost certainly be the worst on records going back half a century.

Builders are hopeful that the low rates could boost sales next year. Low mortgage rates were cited as a key reason the National Association of Home Builders survey of builder sentiment rose strongly in December and January.

So far, the low rates have had minimal impact. Mortgage applications have risen about 6 percent on a seasonally adjusted basis over the past four weeks, according to the Mortgage Bankers Association. But they are coming off extremely low levels.

To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rates don't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for the 30-year loan rose to 0.8 from 0.7; the average on the 15-year fixed mortgage was unchanged at 0.8.

For the five-year adjustable loan, the average rate was unchanged at 2.82 percent. The average on the one-year adjustable loan fell to 2.74 percent from 2.76 percent.

The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable-rate loan was unchanged at 0.6.

The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.
First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713

Visit First Capital Online or call: 310-458-0010