FHA Saves The Day

I'm doing an FHA loan for a client who would not be getting a loan without them. This client has had some mortgage lates and other credit issues along the way and one of the spouses is self-employeed and, like all good self-employeed people, doesn't show enough on their taxes to help the cause. As a result of the FHA loan that allows for non-occupant co-borrowers, this couple is getting into a 30 year fixed at 6.375% compared to the subprime products of late that would have given them a two year ARM at around 8.5%.

Maybe the death of sub-prime mortgages was a good thing after all?

BofA Dumps Wholesale Lending

Bank of America is continuing to shape shift as it deals with it's own, while limited, exposure to the mortgage debacle. What this means for consumers is that now there is one less lender from who they can get a competitive rate. Typically, when a borrower goes through a retail channel of a mortgage lender, there is less room for negotiation on the interest rate and/or closing costs. Broker owners have always been able to give their clients a better deal and they are willing to do so in an effort to build repeat and referral business. The big retail mortgage shops tell their reps that they are giving value with great service, as if the brokers don't provide that.

Bottom line is there are still plenty of strong brokers out their and they are very competitive on rates and terms so do your due diligence and contact a local independent Minnesota mortgage broker before signing any papers with a lender direct rep.

Rates are improving, housing is not

Once again I have to face the headlines on the Internet reminding me that the housing market is suffering. Yahoo today touted that, "Existing Home Sales Fall To Lowest Level In Eight Years".

Oh Well, the good news is that one of my lenders has lowered their rates and is offering a 30 year fixed conforming mortgage at 5.875%.

Countrywide On The Ropes

Countrywide is reeling from an attack by the two headed monster, declining mortgage fundings due in part to stricter standards, and increasing foreclosures. According to an article today from Reuters, Countrywide has eliminated 4,935 jobs in September and plans to eliminate up to another 12,000 jobs by December.

Countrywide challenges stem from the fact that a large percentage of their loans over the past few years have been in the Alt-A and non-conforming loan products, especially the dreaded Option ARM. Only Countrywide knows just how much of their business came from these sectors and if in fact it was 50% or more, we will see even more bloodletting from Countrywide as they try to adjust their business model to the current state of affairs which is consisting of conforming and FHA loans.

Add to that the fact that Countrywide has not historically had the lowest rate in the market for the traditional 30 year fixed product, at least from a wholesale point of view, and you have another factor that will put added pressure on Countrywide's already shrinking revenue stream.

All in all I think Countrywide will survive this tragedy but not without quite a bit more pain and suffering in the coming months.

Another lender eliminates Stated Income Mortgages

I just received this email from one of by larger national lenders, CITI mortgage;

"Greetings,
I was informed today that our Stated Income Verified Assets
program is going away effective Monday (10-15-07). We will be honoring all SIVA
deals submitted before midnight through Sunday at our web site. I've attached
our current rates and feel free to contact me with questions. Again effective
Monday we will be doing full doc loans/lines only.

Thanks for your time. "

It's a real bummer for home owners, home buyers, and the mortgage and real estate professions as this just makes it a little tougher to get a good mortgage if you are self employed or if your spouse contributes to your household income but because of their credit score, you don't want to have them on the loan.

Stay tuned as I think this trend will turn around in the next 6 months and in fact there still are lenders who are offering stated income mortgages in Minnesota and around the country.

Feel free to call me at 612-251-8237 if you are looking for a stated loan product.

Minnesota Mortgage rates update

Minnesota mortgage rates are fairly unchanged today, Tuesday October 9th.

30 year fixed rates are at 6.375% (with a 30 day lock)
15 year fixed rates are at 6.000%

Most lenders are continuing to price the 3,5, and 7 year ARM out of the market as no investor wants to buy them.

Subprime mortgage rates have really gotten horrible in Minnesota ever since the Minnesota Attorney General ran pre-payments out of the state. If you have less than a 660 middle credit score, it's going to be tough for you to find a great deal unless you have some equity in your home. Visit www.firsthomeguide.com for a free credit score estimate.

Minnesota Mortgage Rates update for October 5th

Wow time flies when you aren't getting around to writing in your blog. I promised myself I would stick to a writing schedule a month ago and obviously I had some trouble with that commitment. Sorry for that, I will continue to improve on my writing and my consistency.

Anyway, here are some current mortgage rates for people in Minnesota;
30 year fixed 6.375%
15 year fixed 6.000%
The 3, 5 and 7 year conforming ARMs have rates higher than the 30 year fixed so it would be crazy to even consider them.

Matt Carter of Inman News posted a great question today regarding the revising of the jobs data by our infinitely wise government officials and it's potential affects on rates and markets

Call me, Ken Horst, with any question at 612-251-8237 about these Minnesota mortgage rates and programs or any other mortgage programs you may be interested in.