After real estate crash, giant lenders allowed to dominate

Minneapolis, MN:  Mortgage rates are so low that it may seem like a great time to get a mortgage. For banks, however, it probably is the greatest time ever.

In the old days, there used to be a word for this kind of thing: price gouging.

And who is doing the gouging? Mainly, Wells Fargo and JPMorgan Chase. In the third quarter, reported in the last several weeks, both banks earned robust profits from the mortgage business.

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Are home sellers stupid?

“Broker Bryant, How much do you think our home is worth?” “Well, Mr. Need T. Sell, I think you house is worth about $260,000. However, I’m not here to tell you what your house is worth, I’m here to tell you what it will take to get it sold. In my opinion, I think we should Range Price your property from $239,000 to $259,000 trying to sell as close to $250,000 as possible.” He says in shock, “Broker Bryant, are you crazy? I just had it appraised 6 months ago and it appraised at $275,000! There is no way I am giving my house away at $250,000.”

Now being the “good looking” Realtor that I am, I respond, “Mr. Need T. Sell, you have been on the market for 6 months priced at $265,000 and told me you have not had a single showing. How has that been working out for you?”

He looks at me sternly and says, “Broker Bryant, the reason our house didn’t sell was because our Realtor didn’t do anything. We asked her to run an ad in the paper and she never did. All she did was put up a sign and put our home in the MLS. You can’t sell a house like that. I don’t know how they ever sell a house. All she ever did was call us every month and tell us to reduce the price. That’s the only time we ever heard from her. She’s the one that said she could sell our house at $265,000.”

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Wells Fargo issuing refunds to some FHA mortgage customers

Thousands of Wells Fargo & Co. home loan customers recently received a surprise in the mail: refund checks from the big bank, along with letters saying they had paid unnecessary fees for their mortgages.

The unsolicited offers of thousands of dollars arrived with a catch — if the borrowers cash the checks, they can’t later sue the No. 1 U.S. home lender. The San Francisco bank, which is Minnesota’s largest by deposit market share, said in the letters that borrowers were put into more expensive loans when they could have qualified for cheaper ones.

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Has your Minneapolis area home LOST VALUE? HARP 2.0 can help you refinance!

Has your Minneapolis area home LOST VALUE? HARP 2.0 can help you refinance!

Minneapolis, MN:  What is HARP? HARP stands for Home Affordable Refinance Program, an initiative from the Federal Housing Finance Agency (FHFA) to assist homeowners whose homes are now worth less than what they owe.  And just recently, new enhancements to the program were announced, making refinancing options available again to an estimated one million more homeowners.

If you are a responsible homeowner but the current marketplace loan-to-value (LTV) requirements and need for a new appraisal have made it difficult or impossible for you to refinance at today’s record low interest rates, lenders may be able to help you without needing a new appraisal or meeting previous LTV requirements.

The HARP “Special Refinance Program,” is designed to help up to 9 million American families refinance their loans to a payment that is affordable now and into the future. This program is aimed at helping responsible homeowners “refinance” their loans to take advantage of historically low interest rates. Here are some common Questions and Answers about the Refinancing Initiative in the program.

You may be eligible for a HARP 2.0 refinance if:

  1. The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  2. The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  3. The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  4. The current loan-to-value (LTV) ratio must be greater than 80%.
  5. The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.

If you answered YES to these questions, Click HERE to Apply for a HARP Refinance in the Minneapolis, MN area.

 


MN Mortgage Rates Remain Basically Unchanged

Mortgage Rates Relatively Unchanged

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates moving slightly higher while continuing to remain near their all-time lows helping to support the housing market.

News Facts

  • 30-year fixed-rate mortgages (FRM) averaged 3.41 percent with an average 0.7 point for the week ending October 25, 2012, up from last week when it averaged 3.37 percent. Last year at this time, the 30-year FRM averaged 4.10 percent.
  • 15-year fixed rate mortgages this week averaged 2.72 percent with an average 0.6 point, up from last week when it averaged 2.66 percent. A year ago at this time, the 15-year FRM averaged 3.38 percent.
  • 5-year adjustable-rate mortgages (ARM) averaged 2.75 percent this week with an average 0.6 point, the same as last week. A year ago, the 5-year ARM averaged 3.08 percent.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Mortgage rates remained relatively unchanged this week and should continue to support the housing market and mortgage refinance. Existing home sales in September eased slightly to 4.75 million but was the second strongest annualized pace since May 2010. Moreover, new home sales rose to the most since April 2010. In addition, low rates and strong demand have already pushed the FHFA purchase-only home price index in August to its highest level (seasonally adjusted) since June 2010. And not surprisingly, the Federal Reserve in its October 24th monetary policy announcement acknowledged the further signs of improvement in the housing sector, albeit from a depressed level.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s MN and WI mortgage interest rates.

 


Waiting for lower rates could be costly

St Paul, MN: We get it. You want the lowest mortgage interest rates. What you may not realize is that waiting for that low rate could make you your own worst enemy.

When shopping mortgage rates, understand that the quote you got yesterday or last week is meaningless. Interest rates can change throughout the day and that may cost you dearly while you think about it. Face it, rates change daily – sometimes even multiple times in one day.

Did you know you can pick any interest rate you want? Do you know the difference between the rate and pricing for the rate? Are you willing to pay the price to get a rate? Do you want lower closing costs? Has your loan officer explained these options and differences?

Have you ever thought “When the rate hits (your rate here), I’ll lock.” When the rate does hit your mark there is nothing lenders can do because the application/approval process hasn’t begun. Knowing this here is a simple plan to position you to lock in rates that meet both your payment and equity objectives.

1. Call a local licensed loan officer (not a bank) and begin discussing the refinancing of your home, along with the best rate and cost options to fit your needs.

NOTE: It goes against the grain of what most people think, but your current lender is almost without fail, the most expensive refinance option.

2. If the refinance rate and savings makes sense, start an application with your local lender, but don’t pay any application fee. You may have to pay a small fee to have them pull your credit. If they request/demand an application fee, or have cancellation fees you should select another lender no matter how great their interest rate quote appears.

3. Once the lender has you in application you’re now in a position to lock in a rate that meets both your payment and equity objectives and in the interim you can begin gathering all the needed items to seek an approval for you loan. Starting an application and signing the initial disclosures does not constitute a contract. You are under no obligations at this time to continue.  It does however, allow for an approval, which simplifies the entire process and puts you in the best position of strength for obtaining and locking your rate or making an offer on a new home.

Should you lock a rate, or hold out for something better?

We are asked this question an untold number of times a week. Everyone wants “the lowest rate” and no matter what great refinance rate I quote, human nature takes over. Everyone panics about locking today, because “what if rates go lower next week?” The first question to ask yourself is “Does the rate meet my payment objective?” If so, then lock, it really is that simple.

When the decision to lock has been made there are three possible outcomes;

  • Rates drop – ok, not good, but usually not enough to realistically impact a decision.
  • Rates remain the same – No worries
  • Rates go up – Lucky me, I locked!

So using the three outcomes above you only have a 33% chance of a rate improvement, and a 66% of no change or rates going higher.  What kind of gambler are you?


Mortgage Rates Continue Near Record Lows

Mortgage Rates Near Record Lows As Home Construction Builds Up Steam

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates edging slightly lower with the 30-year fixed averaging 3.37 percent, just above its all-time record low of 3.36 percent, and the average 15-year fixed dipping to a new all-time record low at 2.66 percent.

News Facts

  • 30-year fixed-rate mortgages (FRM) averaged 3.37 percent with an average 0.7 point for the week ending October 18, 2012, down from last week when it averaged 3.39 percent. Last year at this time, the 30-year FRM averaged 4.11 percent.
  • 15-year fixed rate mortgages this week averaged 2.66 percent with an average 0.6 point, down from last week when it averaged 2.70 percent. A year ago at this time, the 15-year FRM averaged 3.38 percent.
  • 5-year adjustable-rate mortgages (ARM) averaged 2.75 percent this week with an average 0.6 point, up from last week when it averaged 2.73 percent. A year ago, the 5-year ARM averaged 3.01 percent.

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Mortgage rates remained more or less unchanged this week as home construction builds up steam.  Construction on single-family homes jumped to an annualized rate of 11 percent in August, the strongest pace since August 2008. Over the first nine months of the year, single-family starts were 23 percent higher than the same period last year. Moreover, home builder confidence rose for the sixth consecutive month in October to the highest level since June 2006, according to the NAHB/Wells Fargo Housing Market Index.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s MN and WI mortgage interest rates.


8 things that will screw up your mortgage closing

Minneapolis, MN:  In the home mortgage approval process, things are not what they used to be.  Underwriting now goes over your entire life with a fine tooth comb.  It really isn’t something to be scared of, if you deserve a loan, you will still get one.

FHA Mortgage Loan Expert in MN and WI
FHA Mortgage Loan Expert in MN and WI

But, there are several places buyers often do things that can turn an approval into a denial. In the excitement of purchasing their new home, they may prematurely make financial moves that impact their mortgage loan approval. Lenders now run a final credit check within a few days of closing, and if it is different from the original credit report, it may be a deal breaker.

Here is a list of 8 things that will screw up your mortgage closing.

1.      Don’t change employment status.  Seems simple, but I’ve had many people over the years quit their job, be laid off, or even terminated

2.      Don’t make any major purchases:  Furniture for the new house sounds great, but can blow your debt-to-income ratio right out of the water.  So can new cars.

3.      Don’t increase credit card debt or miss any payments.

4.      Don’t change bank accounts or make undisclosed large deposits. Any large non-payroll deposit on your last two months bank statements need to be explained and proved.

5.      Don’t apply for a credit card, co-sign on a loan or make a credit inquiry.  Any changes to the original credit report need to be explained and documented.

6.      Don’t spend money set aside for closing, not any, not ever.  Again, seems like common sense, but I once had a client spend their down payment money on a moving truck.

7.     Any delay in providing all paperwork asked for by the mortgage company can and does cause huge problems. When the Loan Officer asks for something, don’t argue or question why they want it, just drop everything and get it to them ASAP.

8.      If you change anything…  anything, let the lender know. You’d be surprised how many times deals get to the closing table and this is the first time the lender finds out the purchase price changed.

Buyers must be sure there is nothing happening personally or financially that might put the closing at risk.  It is too common for buyers, being approved for a mortgage loan, to think that relatively smaller financial issues won’t matter.

The bottom line is tell your Loan Officer everything, and we’ll make sure you have a smooth, stress free, no surprises closing.


Little change in Mortgage Rates this week following employment report

Mortgage Rates Change Little Following Employment Report

Minneapolis, MN: Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates edging slightly higher while remaining near their all-time record lows coming off the employment report for September.

News Facts 

  • 30-year fixed-rate mortgages (FRM) averaged 3.39 percent with an average 0.7 point for the week ending October 11, 2012, up from last week when it averaged 3.36 percent. Last year at this time, the 30-year FRM averaged 4.12 percent.
  • 15-year fixed rate mortgages this week averaged 2.70 percent with an average 0.6 point, up from last week when it averaged 2.69 percent. A year ago at this time, the 15-year FRM averaged 3.37 percent.
  • 5-year adjustable-rate mortgages (ARM) averaged 2.73 percent this week with an average 0.6 point, up from last week when it averaged 2.72 percent. A year ago, the 5-year ARM averaged 3.06 percent.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Mortgage rates were little changed this holiday week following the employment report for September. Payroll employment increased by 114,000 workers, although manufacturing jobs dipped for the second month in a row. Employment in the prior two months was revised up 86,000 and the unemployment rate fell to 7.8 percent, marking the lowest rate since January 2009.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s MN and WI mortgage interest rates.

 


Are you a Serious Buyer or a Time Waster?

Serious Home Buyer?

Minneapolis, MN:  As a professional licensed Loan Officer, I encounter people everyday that say they want to purchase a home.  But when it comes down to it, they may not be ready for that responsibility of a home,  or they are can not get pre-approved for a home loan.

In our society, it seems everyone wants everything now.  Learning that it may take a little time and some effort on the buyers part frustrates many of them them.  Being told “no” simply doesn’t register.  It amazes me the number of people who apply with me, and when I look at their credit report, I see that they’ve applied with 9 other lenders.  Face it, it you’ve been told no 9 times, the 10th time is going to be a no too. Stop wasting my time.

When I deny applicants, we always tell them,  “you don’t qualify right now, but if you do these certain steps you will be able to purchase a home in the future.”

These people are not serious buyers, and just waste the precious time of Real Estate Agents and Mortgage Loan Officers though out all of Minnesota, Wisconsin, and the rest of the country.

Don’t take your frustration out on the messenger.  We want to approve you, but if you are not ready today – you are not ready. We will let you know that you need to alter to get an approval in the future.  Maybe pay off some debt, improve your credit score, or come up with more down payment money.  Sometimes this may mean you don’t get the latest iPhone,  or you keep your older car while you pay down your debt.

Maybe you have had some trouble paying your bills on time in the past and have poor credit.  I’m amazed at those who want, but don’t even come close to proving to a mortgage company that you are ready.  In today’s world, easy options, and loans for everyone don’t exist. You have to prove to lenders you are ready.  This means on time payments,  a good credit scores, prove your income, and have some skin in the game (down payment).

 


Refinancing – Shorter term or longer term?

Minneapolis, MN:  Mortgage interest rates have been hovering at or near historic rates for sometimes now. Most everyone with a home loan is thinking of refinancing.  There are many important items to consider, and an experienced, licensed mortgage loan officer should be more than willing to address all your concerns.

NOTE: Don’t confuse an unlicensed bank application clerk with a licensed mortgage professional.

One major area to consider is the loan term, also known as loan amortization.  This simply means “how many years” are you going to have the loan.  The most popular loan term is still a standard 30-year loan, but you can also pick 10-year, 15-year, 20-year, and 25-year terms too.  A few lenders, like Mortgages Unlimited in St Paul, MN., also allow for any number of years from 8-years to 30-years.  This is an excellent option if you have say, 22-years left and want a new 22-yr loan.

In refinancing, the amortization term question is simple.  Do you want the smallest possible payment (30-yr), or do you want to pay it off faster with a shorter amortization term and a bigger payment.

BENEFITS: Longer loan amortization terms give you the smallest possible payment, but you pay dearly for that with having a mortgage forever, and paying huge amounts of interest.

Shorter loan amortization terms come with higher monthly payments, but you pay the loan off dramatically sooner and save possibly hundreds of thousands of dollars in interest.

BOTTOM LINE: Run a MORTGAGE CALCULATOR to see what payments would look like, then using the answers given, picking the right number of years in your loan amortization to fit you and your individual situation.

 


Mortgage Rates hit all-time record low

Mortgage Rates Hit All-time Record Lows For Second Consecutive Week

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates falling to new all-time record lows for the second consecutive week on mortgage securities purchases by the Federal Reserve and indicators of a weakening economy.

The Federal Reserve’s purchase of long-term fixed mortgage securities allowed the 15-year fixed-rate mortgage at 2.69 percent to fall below the 5-year ARM’s rate at 2.72 percent. The last time the average 15-year fixed was lower than the 5-year ARM was the week ending October 15, 2009.

News Facts

30-year fixed-rate mortgages (FRM) averaged 3.36 percent with an average 0.6 point for the week ending October 4, 2012, down from last week when it averaged 3.40 percent. Last year at this time, the 30-year FRM averaged 3.94 percent.
15-year fixed rate mortgages this week averaged 2.69 percent with an average 0.5 point, down from last week when it averaged 2.73 percent. A year ago at this time, the 15-year FRM averaged 3.26 percent.
5-year adjustable rate mortgages (ARM) averaged 2.72 percent this week with an average 0.6 point, up from last week when it averaged 2.71 percent. A year ago, the 5-year ARM averaged 2.96 percent.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Fixed mortgage rates fell again this week to all-time record lows due to the mortgage securities purchases by the Federal Reserve and indicators of a weakening economy. The final estimate of growth in Gross Domestic Product was revised down to 1.3 percent in the second quarter, representing the slowest growth in a year. In addition, personal incomes rose only 0.1 percent in August, while July’s increase was revised downward. And finally, pending home sales in August fell 2.6 percent, well below the market consensus forecast of a slight increase.”

Freddie Mac’s survey is the average of loans bought from lenders last week, including discount points. Applicants must pay all closing costs at these rates. No cost loan rates higher.

Follow this link to view today’s MN and WI mortgage interest rates.