Mortgage Lending

100% Financing with NO Mortgage Insurance

michaelpfeffer — Thu, 22 Jul 2010 22:20:35 +0000

PNC Mortgage now offers a unique mortgage product that is available in a limited number of markets. It allows 100% financing (97% of the lower of the sales price or appraised value PLUS 3% closing cost and/or pre-paids to make it 100%) yet has NO requirement for Mortgage Insurance. The benefits: less out of pocket and a lower monthly payment (due to no Mortgage Insurance). The available markets include Virginia, Maryland, District of Columbia, West Virginia, Pennsylvannia (there are some others so please reach out of you are wondering about your area).

As with other unique products restrictions apply (such as ratio and income limits) so please reach out with any questions.

michael.pfeffer@pncmortgage.com

Foreclosure Stat

michaelpfeffer — Thu, 29 Apr 2010 20:35:27 +0000

So how many mortgage defaults are self imposed rather than ongoing hardship? It is not surprising that for specific scenarios people walking away from homes because they are underwater with only long-term prospects for regaining the upperhand. Most buy homes as a long-term investment. If that investment is, for example, 100k underwater homeowners simply decide to cut their losses and rent for three to five years until their credit has recovered sufficiently to buy another. So then, what is the percentage? Look here http://tinyurl.com/24re539

Unemployment and Economic Recovery

michaelpfeffer — Wed, 21 Apr 2010 13:16:00 +0000

Unemployment is a pesky problem that lingers. Most large metro areas of the country are still losing jobs. Even as the economy gently moves forward and tries to expand, companies tend to increase the hours of existing employees rather then commit to hire significant numbers of new workers. DC, VA, and MD are relatively healthy if you compare how few jobs they have lost relative to other states. The only areas (cities) in the US that currently show true job growth are low population areas such as Ocean City, NJ.

The following story (link below) is a complete summary of the latest statistics. If you look to the right within this article you will see a great interactive graphic that provides specific data related to Employment, Housing Starts, Housing Prices and Industrial Production within each state in the US. Economic Recovery at MSNBC.

Fannie Mae Homepath

michaelpfeffer — Tue, 20 Apr 2010 17:38:48 +0000

Homepath is a mortgage program created by Fannie Mae that allows financing on Fannie Mae managed foreclosures. It allows mortgage financing for both owner occupants and investors and requires NO mortgage insurance. Homepath allows purchasers to put as little as 3% down (minimum 3% down for owner occupants and 5% down for second homes and investors).

Important points:

Only properties listed on the Homepath website are eligible. www.homepath.com
Available in all states.
Not all lenders are eligible to offer.

Please email me for details or with questions.

michael.pfeffer@pncmortgage.com

Economic and Financial Data 04/09/2010

michaelpfeffer — Mon, 12 Apr 2010 19:16:54 +0000

Here is the latest Economic and Financial Commentary

WeeklyEconomicFinancialCommentary_April092010

FHA update

michaelpfeffer — Sat, 27 Mar 2010 15:06:17 +0000

FHA is working on a program to allow limited-equity homeowners to refinance using FHA, even if their current loan is not FHA. Assuming the borrower has at least 3% equity in the property, they could use the FHA loan vehicle to do a short process refinance.

Many details of this will need to ironed out, such as what to do when the borrower has a second mortage. The larger issue for me…this program is not due out until the fall. It is much predicted, and I tend to agree, that we will see mortgage rates rise this year. The higher rates go, the fewer the number of borrowers that will benefit from this program. It is too early for opinions but this is something worth following.

FHA update

michaelpfeffer — Thu, 25 Mar 2010 01:12:57 +0000

FHA mortgages have two forms of mortgage insurance. The first is incorporated into the monthly payment that we make each month. The other is paid as an up front fee at closing (this is typically financed in the mortgage, thereby raising your loan amount).

Beginning Aril 5th, the Up Front FHA mortgage insurance fee is increasing from 1.75% to 2.25% of the loan amount. On a mortgage of $300,000 that represents an increase of $1500. There has been no announcement about a change to the monthly portion but it has been under discussion.

Ask me about an FHA alternative that requires only 2% down in many markets and has NO mortgage insurance. michael.pfeffer@pncmortgage.com

Conventional Guidelines

michaelpfeffer — Mon, 22 Mar 2010 14:12:59 +0000

Conventional (those following guidelines from Fannie Mae or Freddie Mac) Mortgage Loans that are run through Decision Engines to determine whether a loan is “acceptable” are now facing more stringent guidelines if the decision engine returns a “refer”. It was previously allowed that a loan could be manually underwritten in cases of “refer” if the borrowers total debt made up no more than 38% of their gross income. Beginning March 27th Fannie and Freddie have tightened that requirement. For new originations after March 27 that receive “refer”, allowable ratios will now dictate that the new Mortgage Payment alone can make up no more than 28% of the the gross income (called front end ratio) AND total debt will be required to make up no more than 36% of gross income (back-end ratio). Previously, the back-end ratio allowed was 38% and no front-end was established.

Home Affordable Refinance Program update

michaelpfeffer — Tue, 02 Mar 2010 02:06:08 +0000

The Federal Housing Finance Agency announced an extension to the HARP (Home Affordable Refinance Program) which allows underwater homeowners to refinance exisiting mortgages, assuming the loan sits in a pool managed by Fannie Mae or Freddie Mac. This program was to previously expire this year in June 2010 but was given one more year of life, through June of 2011. Though not perfect HARP has been a successful program in allowing homeowners that would otherwise not qualify to take advantage of lower interest rates.

Refinance Shortfall?

michaelpfeffer — Sun, 14 Feb 2010 13:46:13 +0000

In order to help ease the burden of rising unemployment and falling home values the government created multiple temporary refinance programs. The most successful of these has been HARP. More information about what HARP means can be found here http://michaelpfeffer.wordpress.com/2009/05/26/what-is-a-harp/ .

So how many people have been left out? According to the Mortgage Bankers Association 72.7% of all mortgages in the US have a rate above 5.5% and rates have dropped below 5% multiple times in the last 12 months. More detail can be found in this Washington Post article http://tinyurl.com/yzbmabg.

To be fair this data is not a perfect representation of success versus failure. These statistics obviously do not take into account those that refinanced since this data was collected, likely many months worth of information. It also does not take into account that many individual borrowers have rates just slightly above 5.5% or have already paid many years into their mortgages and CHOSE not to refinance. For many of these borrowers the cost of refinancing just simply did not make sense.