Boomerang Home Buyers Are Flooding the Market!

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When will Lending Standards Begin to Relax?

I get this question almost daily. When will residential mortgage lending standards loosen up so more American's can refinance their homes?

Very capable, qualified homeowners with Fico scores above 700, have steady jobs, strong income, and are never late on their mortgage payment and can't qualify for a new mortgage so they can lower their current interest rate and payment. When will the Fed's and proponents of Dodd-Frank realize how this bill has prevented credit worthy homeowners from taking advantage to current historically low mortgage interest rates? Can you imagine what a boost it would be to the economy if American families had an extra $400-$700 per month discretionary cash flow to buy more goods and services!?
As 30-year rates hit historic lows, some borrowers are hoping that lenders will be loosening their underwriting standards and that it will be easier to qualify for a mortgage.  They're hoping in vain: industry data shows that controls have gotten even tighter. I don't remember where I saw the stat, but the average credit score on new loans closed in August 2012 was 750, nine points higher than a year prior.  Fannie and Freddie borrowers' scores averaged 763 for that same period, and considering that fewer than 22% of Americans have credit scores over 749, there are a lot of people out there who are highly unlikely to qualify for a loan.  Lenders also appear to be requiring larger down payments, with the average Fannie and Freddie borrower putting down 21% (to put that in context, the median down payment in 2005 was 2%.) Originators hope that eventually lenders probably will relax about upcoming regulation, be less fearful about costly buyback demands from the GSEs, and strip away some of their extra credit-risk fees.  The key word here, though, is "eventually."

How About Home Ownership - Is It Now Stronger?

How about home ownership in general - is it now in "stronger hands"? The real homeownership rate, defined as the percentage of households who own a home and are not 90 days or more delinquent on their mortgage, has fallen to 62.1%, the lowest level in nearly 50 years. (The Census Bureau's 65.5% homeownership rate overstates the real level of homeownership in the country since it counts all 3.8 million homeowners who are 90-plus days delinquent on their mortgage as homeowners.) Historically, the spread between the published and real homeownership rates has been slightly below 1%, even in a strong economic environment there is always some level of delinquency. But as we all know, the spread has widened from 1% to 3% due to the economic downturn, and understaffing at the banks who cannot deal with the huge inventory of delinquent mortgages and the complications of loan modification or foreclosure with so many parties involved. We also have lenders treading very cautiously, fearing fees, sanctions and even jail time (in Nevada) for not properly documenting the foreclosure process, and still some confusion from dealing with many Federal government attempts to intervene in the process like HARP and HAMP.

NAR Declares Start to Housing Comeback

http://www.mortgagenewsdaily.com/05222012_existing_home_sales.asp

Mortgage Rates Match All-Time Lows; "Wall" Begins Cracking


http://www.mortgagenewsdaily.com/consumer_rates/259051.aspx

Is Now the Time to Buy Your First House?http://online.wsj.com/article_email/SB10001424052702304299304577348083297932466-lMyQjAxMTAyMDEwNDExNDQyWj.html?mod=wsj_share_email

The HARP 2.0 Refinance Program is Here! Refi up to 125% LTV

 

Attention Underwater Homeowners!  Harp II program may be the biggest event of 2012 and it starts now! Don't missed out on refinancing to a very low interest rate today.  Some of the benefits of HARP II are as follows: Mortgage loan must have closed prior to June 1st, 2009 Loan must be currently owned by Fannie Mae or Freddie Mac No minimum credit score No mortgage lates in the last 6-months & max of 1-30 day late in the last 7 to 12 month period No minimum appraised value required  Primary residence, second home & investments properties are all eligible Home can be currently listed for sale Having a 2nd mortgage does not disqualify you Closing cost can be financed into the new loan If you have an existing Fannie Mae or Freddie Mac loan and desire a lower payment then this program is for you.  We can check if your property qualifies in minutes so please give us a call as so many already have. Remember these are the lowest rates! You may also apply for this program by going to my secure website: http://draslerhomeloans.com/ Tom Drasler Phone: 714-478-3153 tomdrasler@cox.net DRE # 17775516   NMLS# 297791