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.

4.5% Rates From The Feds?? I'll Believe It When I See It!

This morning we have seen a lot of news regarding a push by lobbyists to get the Feds to buy enough mortgage backed securities in the open market to drive rates down to 4.5%.

I say BULL!! I'll believe it when I see it. If their idea of helping the real estate industry is anything like the FHA Secure Programs or the Fannie Mae Hope Loans - its great for political rhetoric, but NO ONE CAN USE THEM!! Out of my 1200 clients - NOT ONE PERSON could use those "historically helpful programs" - so I say BULL!!

I do hope that rates fall to 4.5%, but if they do it should be under normal free market economic conditions, where demand matches supply, where real rates of returns for investors are not clouded with inflationary uncertainty and there are no short term fixes from the government that look great on paper but provide no value to the end user - US - THE TAXPAYERS!!

Here is the BOTTOM LINE: If rates go to 4.5%, without additonal Points, you will be the first to know via my Mortgage Hot Line and Rate Watch Monitor.

More to come...... Jon

We're Not Talking Peanuts Folks!!

Its a beautiful Spring day out there! Hope that the weather stays nice like this for my son's graduation party.

Rates haven't done much since last post - mostly fluctuating betweent that 6 - 6.5% mark.

Next week many of you will be getting my periodic newsletter and this month is a real 'humdinger'. I have a promotion that I will reval. It will be, by far, the Biggest, Baddest, Giveaway that I've ever announced, so you will definately want to stay tuned. As you will see in my newsletter - "we're not talking about peanuts folks!"

OH, by the way - I'm also meeting with one of the Michigan State Housing Development Authority (MSHDA) Representatives next week to do a one on one review of the recent Home Loan Rescue Program, so if you know of someone that could use help on their mortgage I will have more resources to help them. I'll keep you posted. - Jon

Vanished!!

I can't believe that my last entry was March 6th!! Sorry - I bet that you thought that I had vanished...nope....still here trying to read thru and sort out all of the changes that are occurring!

I just wanted to give you a quick update on the rates - in general over the last month the rates have been oscilating between 6 - 6.50%. NOW, please let me disclose that this is the BASE rate - one of the biggest changes to take place in the mortgage industry is the addition of what are called "delivery fees" - what this means is that there is an adjustment made on the rate or fee structure of your mortgage for EVERYTHING from credit scores, to the type of loan, to your loan to value.

Certainly isn't making anything easier in the lending world.

The recent Fed rate cut didn't do much for mortgage rates, other than try to provide more liquidity to the credit markets - in other words, keep things from getting worse.

I will continue to keep you posted and for those of you on the Rate Watch Monitor, I will most certainly make you aware of advantageous drops in the rate when or if they occur.

Watch Your 'Back-ing'

Wow! - Seriously the swings that we are seeing are the worst I have ever seen.

From last Friday, we are up over 1/2% on the 30 year fixed rate - approaching another high that hasn't been seen in the last 3 years.

The news out today is that there are rumors floating around that Mortgage Backed Securities may lose their AAA rating. Remember that the Federal Government provides Fannie Mae and Freddie Mac with full backing in order to reduce the risk to investors. But investors are requiring the highest premiums on Mortgage Backed Securities since 1983. This is why you see the Treasury markets (1-10 year Treasury notes) continuing to go up in price and down in rate, but Mortgages continue to get hammered on price - driving the rates up. OUCH!!!!