Well, the ups and downs of the Wall Street markets and the capital markets have been front page news these past few weeks. But the big news is that something substantial has developed out of all of this. Fannie Mae and Freddie Mac have been replaced by a new government agency that incorporates both of them with Ginnie Mae. The new agency is the Federal Housing Finance Agency (FHFA). I don't know if it will morph into a name like Ginnie Mae or Fannie Mae, but it was inevitable once the Feds took back Fannie and Freddie.
I personally hope all the deadwood that the government allowed to pile up in both agencies get pushed out onto the streets and have to find real gainful employment in the open market. Good luck to them all. If they were there to oversee the management of the mortgage industry and to help homeowners, they failed miserably. Perhaps their judgement was clouded by 3 martini lunches and spending too much time in posh private spas! (ENOUGH!!!!!)
Anyway, the new agency, FHFA, will look more like Ginnie Mae than its predecessors. The new loan limits across the board will be much like FHA limits. The lowest will be $417,000 for conventional lending and the highest will be $625,500 in the high cost areas. There may be some adjustments in high cost urban areas as well.
There will be other issues to resolve as this begins to be implemented after the first of the year.
This blog will keep you informed.
I would be pleased to look into any concerns or added information.
Just drop me a line.
Tuesday, November 11, 2008
Monday, October 20, 2008
MORTGAGE UPDATES
Well, as you have seen, the mortgage industry has been bounced around and battered almost as severly as investment firms and investments in general the past couple of weeks.
The big news in mortgages right now is rates!
Last week alone rates for the most popular programs, 30 year fixed, 15 year fixed and 5-1 ARMs rose nearly .500% from the previous week. It was the biggest one week rise in rates in over 20 years.
Some say it is a result of the $700 billion government bailout. Banks are reluctant to open their wallets due to uncertainty about what to lend and who to lend to. The government's $100 billion investment in 9 of the countries largest and strongest banks may help loosen up credit. The theory is that with improved capital positions, banks should be able to increase lending activity immediately. We shall see!
As far as blue skies or rays of sunshine breaking through the dark clouds, watch billionaire investor Warren Buffett. He is buying US stocks with his own money right now! His major purchases have been Wells Fargo, Goldman Sachs, US Bank and Sun Trust. Buffett has always subscribed to the theory of "buy low and sell high". He seems to think that stocks right now are a bargain and there is much upside for very profitable appreciation over the next 10 years.
With the bank investments, his theory seems to be that if banks don't lend they don't make money. Perhaps he sees more open lending policies on the horizon.
The big news in mortgages right now is rates!
Last week alone rates for the most popular programs, 30 year fixed, 15 year fixed and 5-1 ARMs rose nearly .500% from the previous week. It was the biggest one week rise in rates in over 20 years.
Some say it is a result of the $700 billion government bailout. Banks are reluctant to open their wallets due to uncertainty about what to lend and who to lend to. The government's $100 billion investment in 9 of the countries largest and strongest banks may help loosen up credit. The theory is that with improved capital positions, banks should be able to increase lending activity immediately. We shall see!
As far as blue skies or rays of sunshine breaking through the dark clouds, watch billionaire investor Warren Buffett. He is buying US stocks with his own money right now! His major purchases have been Wells Fargo, Goldman Sachs, US Bank and Sun Trust. Buffett has always subscribed to the theory of "buy low and sell high". He seems to think that stocks right now are a bargain and there is much upside for very profitable appreciation over the next 10 years.
With the bank investments, his theory seems to be that if banks don't lend they don't make money. Perhaps he sees more open lending policies on the horizon.
Friday, October 3, 2008
REVERSE MORTGAGES
Great news just in from HUD regarding the loan limits for Reverse Mortgages. HUD has announced that in the not too distant future, maybe by the end of this year, they will be raising the limit on all Reverse Mortgages guaranteed by HUD to $417,000. That means that in the high cost areas we will see an increase from $362,760. Lower cost areas will see an even greater increase because of the decision to have one flat limit in all 50 states.
This is great news for seniors who have been on the fence about a reverse mortgage. We are encouraging seniors who have been on the fence to begin the process now with their chosen lender so they can fund at the higher level when the new limit is instituted. Your lender should be able to give you a very accurate idea of how much you will qualify for with the increased limit using existing calculators. If your lender cannot, I can. Just drop me a line and I will be pleased to assist you.
This is great news for seniors who have been on the fence about a reverse mortgage. We are encouraging seniors who have been on the fence to begin the process now with their chosen lender so they can fund at the higher level when the new limit is instituted. Your lender should be able to give you a very accurate idea of how much you will qualify for with the increased limit using existing calculators. If your lender cannot, I can. Just drop me a line and I will be pleased to assist you.
Wednesday, September 24, 2008
Mortgage Industry Update
A lot of water has gone over the dam since last I posted information here. Since last winter several large mortgage lenders have either gone out of business entirely or have "right sized" their operations by eliminating one or more lending platforms that they were supporting.
GMAC Mortgage LLC happens to be one of the more significant lenders to make drastic changes to their way of doing business. On September 5, 2008 GMAC eliminated over 200 retail offices and all retail lending operations. In addition they ended all wholesale lending activity. This left only their internet and phone call-in origination platforms.
Unfortunately, it also left the servicing operations as well, so if you were thinking perhaps there was no place to send your monthly payments and your mortgage was somehow cancelled, not so fast!
On a more significant note, there will be huge changes in the way mortgages are originated and underwritten in the coming few years as a result of the federal government bail-out of Fannie Mae and Freddie Mac. The changes have not been mentioned in any publications as yet. Our best guess is that conventional conforming mortgages will look more like the FHA versions of mortgages as a result of this bailout. We will keep yo apprised of this as details emerge. In any event, as the saying goes, mortgages in the near future "will not be your father's Oldsmobile"!
Stay tuned, and don't give up looking at great deals on real estate or mortgages. Opportunity is right in front of you.
GMAC Mortgage LLC happens to be one of the more significant lenders to make drastic changes to their way of doing business. On September 5, 2008 GMAC eliminated over 200 retail offices and all retail lending operations. In addition they ended all wholesale lending activity. This left only their internet and phone call-in origination platforms.
Unfortunately, it also left the servicing operations as well, so if you were thinking perhaps there was no place to send your monthly payments and your mortgage was somehow cancelled, not so fast!
On a more significant note, there will be huge changes in the way mortgages are originated and underwritten in the coming few years as a result of the federal government bail-out of Fannie Mae and Freddie Mac. The changes have not been mentioned in any publications as yet. Our best guess is that conventional conforming mortgages will look more like the FHA versions of mortgages as a result of this bailout. We will keep yo apprised of this as details emerge. In any event, as the saying goes, mortgages in the near future "will not be your father's Oldsmobile"!
Stay tuned, and don't give up looking at great deals on real estate or mortgages. Opportunity is right in front of you.
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