Fannie 3% Down is Back!

Good news! The Fannie Mae 97% LTV is back! The 3% down payment is once again available for both purchase and limited cash-out refinances. Fannie Mae is providing multiple options to help serve creditworthy borrowers. Program Will allow LTV ratios greater than 95% up to amaximum of 97% for: ·         Purchase transactions if at least one borrower is a first-time home buyer and pre-purchase home-buyer education is completed ·         Limited cash-out refinances (non-MCM) of existing Fannie Mae loans. ·         All loans must be fixed-rate and secured by a one-unit principal residence. Manufactured housing is not permitted. ·         Fannie Mae will now allow reserves to come from gifts.  Call me Today to Learn More About This Exciting Program Sure to Boost 1st Time Home Buyer Purchases and Home Refinances in 2015!

California Leads U.S. Growth of +$1M Luxury Home Sales

Redfin, the large national real estate firm based in Seattle, is reporting that, while sales of homes costing over $1 million is still outpacing the rest of the market, the source of these sales is changing.  The company says that the luxury housing market, which was the first segment to recover after the housing crisis, continues strong, driven by a record high stock market, low interest rates and by foreign investors.

Sales of home costing more than $1 million increased by 9 percent in the third quarter of 2014 even as all home sales were down 1.2 percent when compared to the third quarter of 2013.  However Redfin says that overseas investment in these homes is beginning to flag and those markets which have benefitted the most from foreign investors are seeing "a steady and dramatic decline in sales of million-dollar-plus homes."  Those cities where there is less reliance on investors, both foreign and domestic, are still seeing a steady increase in high-end sales. 

Looking forward the company says that luxury home sales will continue strong for the rest of this year and the next but, at just under 3 percent of the market, those sales will have a limited impact on overall market growth.  "This sector of the market, particularly in the places that have typically had strong foreign interest, will need traditional (and well-heeled) buyers to offset disappearing demand from international investors."

Internet Lender Hit with $20 Million Plus in Penalties

WHY MORTGAGE INTEREST RATES ARE RISING

The bond and mortgage markets started this morning where they left off yesterday, interest rates are increasing and mortgage rates going higher. Yesterday’s surprise 4.0% Q2 GDP, Q1 revised from -2.9% to -2.1% and the Q2 deflator at 2.0% took all of the bullishness out of the rate markets. Geopolitical situations are also being pushed back as increasing belief that Ukraine/Russia and Israel/Hamas are more regional and won’t escalate to wider perspectives. The US stock market, the European stock markets are under pressure and likely will sell off more as economic reports increase the outlook that the Fed will increase interest rates sooner than expected. In the policy statement yesterday the Fed said it will keep the FF rate at current levels for an extended period. The Fed concerns that the employment gains show significant under utilization in the labor markets (low paying and part time jobs) went nowhere in the minds of traders in stocks and bonds. Under the headlines there is more dissension within the FOMC on when to increase the FF rate; we get the sense that more members are leaning toward an earlier increase than what was stated in the policy statement. That is what markets are also thinking. 

Latest Numbers on Health of Existing Home Sales

For news yesterday, Existing Home Sales rose to 4.89 million in May from an upward-revised 4.66 million in April, up 5% on a sequential basis but down 5% on an annual basis. Total inventory rose 2.2% to 2.28 million homes which represents a 5.6 month inventory (6 months is considered a "balanced" level). The median home price rose to 213,400 which is up 5.1% on an annual basis. Distressed sales were 11%, down from 18% a year ago. The first time homebuyer continues to be MIA, with only 27% of sales going to first-time buyers. All cash sales were 33%, and median time on market was 47 days. On a regional basis, the West continues to be soft, with sales only up 0.9% m-o-m and still down 11.4% y-o-y. This likely reflects the diminished inventory of distressed properties in the region and stretched affordability given the sharp gain in prices in much of the U.S.

Sluggish Housing Market A Product Of Millions Of 'Missing Households'

There are 2 million "missing households" in the US - which represents pent up demand for new residences in the US. These are Millennials who are living with their parents or rooming together in an apartment. That represents 2 years of housing starts at the current pace. Rents are increasing, jobs are tough to get, and student debt is high. Fun fact - we haven't been building this few homes since World War II, according to the NAHB.

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Interest Rates Fractionally Lower this Week

Data Provided by Freddie Mac's Primary Mortgage Market Survey® Rates listed are for conforming mortgages up to $417,000  Week ending on 05/15/14 Interest Rate Fees & Points Margin  30 Year Fixed Rate 4.20% 0.6 N/A  15 Year Fixed Rate 3.29% 0.6 N/A  5/1-Year Adjustable Rate 3.01% 0.4 2.72  1 Year Adjustable Rate 2.43% 0.5 2.72 For up-to-the-minute local mortgage interest rate information, contact:  Tom Drasler at Direct (714) 478-3153  Week ending on 05/08/14 Interest Rate Fees & Points Margin  30 Year Fixed Rate 4.21% 0.6 N/A  15 Year Fixed Rate 3.32% 0.6 N/A  5/1-Year Adjustable Rate 3.05% 0.5 2.74  1 Year Adjustable Rate 2.43% 0.4 2.71

This is not intended as an advertisement of interest rates as defined by Regulation Z, Section 226.24. Data is provided by Freddie Mac's Primary Mortgage Market Survey (PMMS) and is provided for informational purposes only. The financial and other information contained herein speaks only as of the date posted herein. Freddie Mac, and/or the sender of this information, is not responsible for business decisions made based on the reported results of the PMMS. In general, the data presented were calculated from information collected Monday through Wednesday of the same week that the PMMS is released and may not reflect mortgage rates, fees or points currently available. Average fees and points are provided to reflect the total upfront cost of obtaining a mortgage. Borrowers may still pay closing costs which are not included in the survey.

Weekly Commentary

by Frank Nothaft, vice president and chief economist, Freddie Mac

"Mortgage rates were little changed amid a week of light economic reports. These lower than expected rates are welcome news with the spring home buying season underway and may even provide those who haven't already refinanced possibly a reason to take another look. Of the few releases, advanced retail sales rose 0.1 percent in April, but below the market forecast consensus of a 0.4 percent increase. Also, the Producer Price Index for final demand rose 0.6 percent in April which followed a 0.5 percent boost from the prior month."

Mortgage Rates Fell Back to 2014 Lowest Levels

Mortgage rates fell back to their lowest levels of 2014, with most lenders in similar territory to last Friday.  Market movement was moderate, but grew increasingly positive for MBS (the mortgage-backed-securities that dictate lenders' rates) as the day progressed.  As such, some lenders released positive mid-day reprices.  Before those, rates were just slightly higher on average.  The most prevalently quoted conforming 30yr fixed rate for best-case scenarios (best-execution) remains at 4.25%, and is currently closer to 4.125% than the previous rate of 4.375%. Today's improvement was seen in the form of slightly lower closing costs.  That change in costs equates to an effective rate change of 0.02%.

Where Will Mortgage Interest Rates be in 2015?

Many people ask me where I believe mortgage interest rates will be in the next year or so. Unfortunately, there is no way of knowing, other than we know as the economy improves, and the Fed’s stop manipulating the monetary system, mortgage interest rates will continue to  rise. The folks at the Mortgage Bankers Association, just published a forecast on April 8^th, 2014. Here is the link to our mortgage market forecast and historical quarterly origination's, posted on the MBA website.The forecast provides quarterly data on historical and forecast ed housing starts, interest rates for 30 and 10 year fixed mortgages, and loan origination's.

Clearly, mortgage origination's have significantly dropped, primarily due to interest rates rising 1% in the last year. For example loan origination's for Q1 of 2013 was $524 billion versus Q1 of 2014 at $226 billion. However, both purchase of new and existing home sales has dropped, likely due to investors leaving the market and the recent run up in home valuations.

For people who are looking to purchase or refinance residential real estate, evaluate the cost of waiting, as interest rates WILL rise over the next year.

If you or someone you know, is looking to purchase or refinance residential property, send them my way for a complimentary analysis. 

National Home Values Expected to Increase by 3.3% in 2014

Zillow's first quarter Real Estate Market Reports show home values increased 0.5 percent from the fourth quarter of 2013 to $169,800. The Zillow Home Value Index (ZHVF) climbed 5.7% from March 2013 levels. On a monthly basis, home values are up 0.2% nationally. Zillow writes, "According to the Zillow Home Value Forecast (ZHVF), we expect national home values to increase 3.3 percent over the next year (March 2014 to March 2015). Of the 301 markets covered by the Zillow Home Value Forecast, 282 markets are expected to see increases in home values over the next year, with the largest increases expected in the Riverside metro (12.0 percent) and the Orlando metro (8.2 percent)." Nationally, the number of homes listed for sale on Zillow was down 0.5% annually in March (seasonally adjusted), after having increased on a monthly basis late last year for several months in a row. Inventory rose on an annual basis in 337 out of 648 metros Zillow covers with inventory data.

Top 10 Areas in U.S. Experiencing Highest Price Increases

This is a very interesting article illustrating how California home values have increased compared to other states in the U.S. Feel free to call me if you have any questions with regard to loan program qualification.

Tom

Home Prices Continue Higher, Some States Above Pre-Crisis Peaks

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Apr 28 2014, 12:06PM

Home prices nationwide have now recovered to within 13.5 percent of the peak they reached in June 2006.  The national Home Price Index (HPI) provided by Black Knight Financial Services' Data and Analytics Division is $233,000, inching closer to the $270,000 HPI that was the pre-crisis peak. This presents an increase of 7.6 percent from an HPI of $217,000 in March 2014 and a 0.7 percent increase from February. 

Ten states had increases in their HPI's greater than that 0.7 national monthly average.  Oregon and Washington posted monthly gains of 1.4 percent followed by California Nevada, and Hawaii at 1.3, 1.2, and 1.1 percent respectively.  Other states with larger averages were Colorado, Missouri, the District of Columbia, Texas, and Illinois.  The smallest improvements were in Ohio and Vermont which were unchanged from February, Arkansas, up 0.1 percent, and Connecticut, Maryland, Kentucky, New Jersey, and Massachusetts each of which had a 0.2 percent increase in their respective HPIs.

Mortgage Lenders Ease Rules for Home Buyers in Hunt for Business

I am often asked if and when will lending guidelines will ease up, particularly for first time home buyers. Well, we're starting to see lenders try to shore up lost volume due to interest rates rising in the last year. This article publised this week in the Wall Street Journal lays out opportunities available today for home buyers. HomeQuest Mortgage offers these new programs along with a choice of lenders to ensure borrowers select the right mortgage for them.

 http://blogs.wsj.com/five-things/2014/04/18/5-questions-on-the-state-of-mortgage-lending/

Next Gen Home Buyers Speak a Different Lanquage

The median age of Realtors is 57, whereas the median age of first-time buyers is 34. If you want to effectively serve “next-gen” buyers and sellers, it’s imperative that you learn to speak “digital.” I recently heard realtor.com Vice President Max Pigman outline how the real estate conversation of today has shifted dramatically from that of the past. While real estate is still discussed at all types of get-together s, the digital conversation is taking place in an entirely different way.

While it’s obvious that “Gen Next” buyers and sellers are wedded to their mobile devices, most Realtors have yet to tap into communicating with them the way that they prefer to communicate. If you want to be more effective at speaking the digital language of today’s Gen Next consumer, here’s how to do it:

1. Texting is a different language
According to Pigman, 24 percent of today’s buyers and sellers would like to conduct their transaction entirely by text messaging. Texting is really a mix of short verbal messages coupled with links to pictures and/or videos. It requires an entirely different way of thinking about how you communicate, especially if you’re older.

As a rule of thumb, videos have the highest open rates, higher than open rates for links. If you have the choice between sending an embedded video that requires only the user to click to play vs. a link, always opt for the click-to-play video.

In terms of open rates on other types of media, pictures are next, followed by words. The least effective method is leaving a phone message. Pigman cited recent research showing that many millennials not only view phone messages unfavorably, they consider phone calls to be an invasion of their privacy.

- See more at: http://www.inman.com/2014/04/07/wanna-effectively-serve-generation-next-homebuyers-learn-to-speak-digital/#sthash.rv9qy5mm.CAOJ7Wx3.dpuf- See more at: http://www.inman.com/2014/04/07/wanna-effectively-serve-generation-next-homebuyers-learn-to-speak-digital/#sthash.rv9qy5mm.CAOJ7Wx3.dpuf

Weekly Interest Rate Report

Weekly Mortgage Interest Rate Report  —  February 27, 2014

Tom Drasler CA Licensed Mortgage Advisor - CA BRE#01775516, NMLS#297791 Direct (714) 478-3153 Send me an email     |   Visit my website HomeQuest Mortgage Corporation 25283 Cabot Road, Suite 108 - Laguna Hills, CA 92653

Data Provided by Freddie Mac's Primary Mortgage Market Survey®  Week ending on 02/27/14 Interest Rate Fees & Points Margin  30 Year Fixed Rate 4.37% 0.7 N/A  15 Year Fixed Rate 3.39% 0.7 N/A  5/1-Year Adjustable Rate 3.05% 0.5 2.74  1 Year Adjustable Rate 2.52% 0.4 2.71 For up-to-the-minute local mortgage interest rate information, contact:  Tom Drasler at Direct (714) 478-3153  Week ending on 02/20/14 Interest Rate Fees & Points Margin  30 Year Fixed Rate 4.33% 0.7 N/A  15 Year Fixed Rate 3.35% 0.7 N/A  5/1-Year Adjustable Rate 3.08% 0.5 2.74  1 Year Adjustable Rate 2.57% 0.3 2.71 This is not intended as an advertisement of interest rates as defined by Regulation Z, Section 226.24. Data is provided by Freddie Mac's Primary Mortgage Market Survey (PMMS) and is provided for informational purposes only. The financial and other information contained herein speaks only as of the date posted herein. Freddie Mac, and/or the sender of this information, is not responsible for business decisions made based on the reported results of the PMMS. In general, the data presented were calculated from information collected Monday through Wednesday of the same week that the PMMS is released and may not reflect mortgage rates, fees or points currently available. Average fees and points are provided to reflect the total upfront cost of obtaining a mortgage. Borrowers may still pay closing costs which are not included in the survey. Weekly Commentary by Frank Nothaft, vice president and chief economist, Freddie Mac "Mortgage rates edged up with new home sales exceeding expectations and rising to a seasonally adjusted pace of 468,000 units in January, the strongest annual rate since July 2008. The 9.6 percent increase in new home sales for January followed an upward revision of 13,000 units in December. The S&P/Case-Shiller® 20-city composite house price index rose 13.4 percent over the 12-months ending in December 2013."

CHASE ANNOUNCES BIG LAYOFFS - WHAT BIG BANKS WILL FOLLOW?

I believe there has been a resurgence of realtors utilizing the services of  traditionally more service oriented and experienced mortgage brokers. For one, mortgage brokers offer more lender options; they are licensed by the BRE, and are required to pass stringent state and federal exams as a result of the Dodd-Frank Act. Retail banks such as Chase, do not require their LO’s to have these credentials.  

JPMorgan Chase announced that a couple thousand positions would be eliminated, changed, restructured, whatever term you'd like to use. Rumors are large numbers of LOs leaving the bank for several weeks now - perhaps they saw the writing on the wall: 2000? Or is it 5,000? Or 6000? Or 8,000? Who can keep track! Seriously, many attribute these activities to new Qualified Mortgage (QM) guidelines effective this Jan. 10th from the Dodd-Frank CFPB. ("JPMorgan Chase is scaling back its mortgage products as the market cools. The company plans to eliminate 22 of its 37 mortgage products and programs by the end of 2014, according to a Tuesday presentation to investors. It has already jettisoned 12 and plans to get rid of 10 more by the end of the year.") And thus the consumer loses 60% of the available mortgage programs at Chase. And should we assume some of those 15 programs left are Private Banking? In that case, most consumers do not have $1 million in cash in JPM, so the damage could be even worse. One wonders when the other big guys will follow suit

Don't Get Excited by Jump in New Home Sales

There has been quite a bit of chatter about the recent rise in new home sales. If you dig down into the numbers and prior year chart comparisons, you might be surprised to see it may not be time to go out and buy a bunch of builder stocks.

Don’t Get Excited by Jump in New Home Sales

Wall Street Journal, February 26^th, 2014

New home sales jumped to the highest level since July 2008 in January, which is really good news if it holds. But the Census new-home sales data is a choppy indicator with a small sample size, and when you take a longer look at the series it’s pretty clear that the nation’s two-year-old real estate turnaround is still largely a recovery in prices.

The building of new homes — the housing sector’s biggest contribution to annual economic growth — continues to lag badly. This disconnect goes a long way toward explaining why U.S. growth is still pretty weak some four years after the recession. It’s also why economists’ hopes that 2014 will finally be a breakout year for the economy depend on home building regaining its footing in the spring. 

http://blogs.wsj.com/economics/2014/02/26/dont-get-excited-by-jump-in-new-home-sales/?mod=wsj_valettop_email

To View My Client Testimonials Visit: http://www.linkedin.com/in/tomdrasler

Buying a Home versus Paying Rent - a financial benefit analysis

Why Pay over $2700 in rent when you could enjoy the benefits on home ownership. See how you can purchase a $600,000 with special low down payment programs and actually pay much less than rent. Click on the following link for a free illustration on the financial benefits.http://mcedge.tv/16i61d

Is Housing Really Unaffordable Today?

While there is much discussion regarding the formation of another housing bubble and incomes not keeping up with the rise in home values, you may be surprised at these findings.
WSJ Blogs - Is U.S. Housing Unaffordable? It Depends on How You Chart It - Developments

The Benefits of Owning Vs. Renting - a financial perspective

Look at the benefits of home ownership versus renting. I put together an analysis illustrating the financial benefits of buying a $600,000 home versus throwing away your money on renting a similar property for $2750 per month. Go to this linkhttp://mcedge.tv/16i61d

ARE WE HEADED FOR ANOTHER HOUSING BUBBLE?

 The most important chart in housing right now http://t.co/a7R41Ptlfp

5 Things To Watch For Housing in 2014

http://blogs.wsj.com/five-things/2014/01/07/5-things-to-watch-in-housing-in-2014/

Effective Friday, January 10th, Fannie Mae and Freddie Mac borrower eligibility requirements tightened, making it even harder for the self-employed to qualify for a mortgage. In addition, debt-to-income requirements dropped from 45% to 43%, requiring borrowers have higher incomes and lower debt load. There are other mortgage program options borrowers will want to consider that include loans from portfolio lenders, as opposed to those sold to Fannie Mae and Freddie Mac. As a mortgage broker, I have several options to fit the unique profile of every borrower, that may not be available from your local retail bank or direct lender. One size does not fit all. Feel free to call me at 714-478-3153 should you have questions on what mortgage options are best for you.

Very Cool Interactive Map Illustrating Home Appreciation History Across the U.S.

Here's a very cool interactive map showing home price appreciation by state during different time periods. (Pass your cursor over the time period or state desired. Thanks to Brian Larrabee, founder of Estate of Mind, Inc., New York, for passing this along.)