What's New In Mortgages For 2010??

As we approach a New Year, be prepared for more stringent lending standards. The new Good Faith Estimates to be released in 2010 will be another step forward in protecting the consumer against predatory lending practices, especially the "Bait & Switch" tactics used by many unscrupulous lenders during the peak of the mortgage boom. I personally am glad to see this type of regulation. However, other tighter underwriting guidelines will have a negative impact on the availability of credit and only exacerbate the issue of a weak economy in my opinion.

In general, new home buyers would be wise to take advantage of the combination of low house prices, historically low interest rates and government funded subsidies through tax credits, but take an ultra conservative approach that allows you to pay-off debt, including home mortgages, at expedited rates.

Stay tuned for the launch of my program in 2010, THE BIG PAY-OFF, as our country reconsiders the definiton of weatlth & debt in the New Economy.

Homeowner Affordability & Stability Plan

The long awaited Homeowner Affordability & Stability Plan was launched last week. As with any government backed program, it has its advantages and disadvantages.


How do you know if you are qualified for refinancing under the plan?


I have broke it down into several steps that I take for my clients:

1. First determine who the original investor of your mortgage was. If Fannie Mae, any lender eligible to origniante refinances under the Affordability & Stability Plan can help you with your refinance. If Freddie Mac, ONLY the current lender servicing your loan can help. If your loan was through any other lender than Fannie Mae or Freddie Mac (examples: a local credit union, a non-conforming or sub-prime lender, etc.) you will not be eligible for the Plan.


2. Next we review credit scores and income to determine qualifiying eligibilty and if any additional 'delivery fees' will be required for utilizing the Plan.


3. After receiving credit, we make our best attempt, with your help, to determine an estimated value range for your home. Even under the Affordability & Stability Plan, the current value of your home has an impact on your eligibility for the program and the potential fees related to refinancing under the Plan.


4. Upon completing these first 3 steps, we will determine the costs/fees of the new loan and the corresponding interest rate. This allows you to determine the potential savings/benefits to you in terms of real numbers.

Points of interest about refinances under the Affordability & Stability Plan

• It DOES NOT allow you to consolidate or roll in a second mortgage. If you have a 2nd mortgage on your home (ie: home equity loan, line of credit, home improvement loan) I suggest calling the lender and asking them if they will subordinate the loan to a new 1st mortgage originated under the Affordability & Stability Plan. If the sum of your first and second mortgage exceed 95% of the new appraised value, you can expect to pay up to 1.5% of your new loan amount in a 'delivery fee' plus normal closing costs.
• Condos - if your current appraised value is requiring you to utilize the Plan and your loan was originally sold to Fannie Mae, you will pay an additional delivery fee of 1.0% of your loan amount.
• Credit Scores - if your loan was sold to Fannie Mae, credit scores have a substantial impact on the fees associated with your loan. Additional 'delivery fees' can begin at .25% of your loan amount and go as high as 3.0% of your loan amount.
• Appraised Vaules also have a considerable impact on the fees associated with your loan. If your mortgage amount exceeds 95% of the appraised value you can expect to pay as much as 1.0% of your loan amount in an additional 'delivery fee'. Loan amounts exceeding 105% of the appraised value will be ineligible for refinancing under the Affordability & Stability Plan. In some instances, appraisals may not be necessary. Fannie Mae and Freddie Mac each have their own version of automated property valuations.

For more details regarding the Homeowner Affordability & Stability plan, you can call my office direct at 517-783-1780 or e-mail me at jmykala@fpfc.net

Time To Eat Crow...I Guess The Feds Can Do 4.5%!!

OK, so everyone is wrong on occasion and I'm no exception. We are now seeing rates below 5%. While a 4.5% 30 year fixed rate has yet to materialize, I have locked clients at 4.5% 15 year and 4.75% 20 year mortgages. If you are on my client list, you will be receiving a notice next week regarding our Financial Stimulus Package (FSP) Refinance. For those who are eligilble this is truly an unprecedented opportunity to cut your interest expense by THOUSANDS - litterally!

My average client will save over $50,000 with this program WITHOUT increasing the current monthly payment.

Next week we will also receive the details behind the new Administration's Home Owner Stability & Affordability Plan. This is of particular interest to many of you because it contains provisions over refinancing your existing loan when your home doesn't appraise.

I will be sure to post the details as soon as I have the information in hand.

In the meantime, I am receiving a lot of questions regarding whether you should refinance now or wait for rates to drop further. To answer that question I am publishing a short video to describe the events that are currently taking place and why I recommend taking advantage of the current low rates as soon as possible.