Help from a different source

This article was on msn.com today. It featured comments in the last paragraphs from one of the other loan officers that works with me at Cornerstone Mortgage.


msn.com

I've been busy

Much apologies to those who have tried to follow either the mortgage industry or my views on the mortgage industry over the past 3 months. With the volume in the industry I had neither the time or the energy to sit and write. Then I had the misfortune of tearing my Achilles tendon which made getting around that much more challenging. So to reduce stress and focus away from work when I could I took up on line poker. This past weekend I entered my first live tournament and here is a link to an article about how it went:

insidestl.com

Mortgage Cramdowns

I was recently interviewed for my thoughts on the proposed legislation to allow bankruptcy judges to reduce the principal amount owed on mortgages and to change the borrowers payments. To read the complete article go to:

ibjonline.com

The article is on the first page.

Please let me know if you have any questions or comments!

We are getting farther away yet closer still

As we watch the 30 year fixed rate mortgage hover around 5.75% today and still field phone calls from people who want 4.5% or lower, we need to be aware of that the government still has not stepped to the plate and followed through with their promise. Only today did they shed some light on where they are with the purchase of mortgage backed securities:

JP Morgan article

Until they begin purchasing these securities in bulk we will continue to see rates languish between 5.5% and 6%. Even then, if they wait too long to act, there may be other forces that will not allow the rates to go lower.

Stay tuned more interesting times!

MHDC Press Release

MISSOURI HOUSING DEVELOPMENT COMMISSION

Strength, Dignity, Quality of Life

3435 Broadway, Kansas City, MO 64111

Kathryn Watts, Government Affairs, 816-759-6824; e-mail kwatts@mhdc.com

MHDC is the state's housing finance agency. The Commission is dedicated to strengthening communities and the lives of Missourians through the financing, development and preservation of affordable housing. MHDC was created by the General Assembly in 1969 and since that time it has invested $5 billion for the development of affordable rental housing and mortgages for first-time homebuyers in Missouri. MHDC functions much like a bank, providing financing directly to borrowers, developers or through a network of private lending institutions. MHDC is one of only three state housing agencies in the nation to receive an issuer credit rating of AA+ from Standard & Poor’s.

News Release/News Advisory/Request for Coverage – 01/16/09

MHDC Rolls Out Innovative New Program For First-Time Homebuyers

Starting January 14th, 2009, Missouri Housing Development Commission (MHDC) will have a new product to enable first-time homebuyers to take advantage of the $7,500 federal first-time homebuyer tax credit. This program is the first of its kind in the nation.

The federal first-time homebuyer tax credit was created by Congress this summer to encourage new homebuyers to purchase homes and thereby stimulate housing markets. However, the federal tax credit has been largely ineffective. One of the primary reasons the federal credit hasn’t worked is that the homebuyer doesn’t receive the money until he receives his federal income tax refund – which may be several months after the home is purchased.

With over 30 years experience funding mortgages for first-time homebuyers, MHDC knows that the biggest barrier faced by first-time homebuyers is acquiring money for down payment and closing costs. As a result, MHDC created a program that allows homebuyers to receive the value of the tax credit at the time of closing.

How the Federal First-Time Homebuyer Tax Credit Works:

• First-time homebuyers receive a tax credit worth 10% of their home purchase, up to $7,500. The credit is claimed on the homebuyer’s federal tax return. The credit is refundable, which means that the homebuyer receives a refund for the amount of the credit minus any federal tax liability. The credit is essentially an interest-free loan from the federal government and must be repaid through an increase in federal income taxes over a period of 15 years.

How the MHDC Tax Credit Advance Loan Program Works:

• MHDC makes a second mortgage to the homebuyer at the time of closing worth up to 6% of the home purchase price or a maximum of $6,750, which is used to cover down payment and closing costs. The tax credit advance loan is paired with MHDC financing for the first mortgage in the form of a safe 30 year, fixed rate mortgage. The homebuyer then files for the federal tax credit and uses the credit refund to pay off the MHDC tax credit advance loan. If the tax credit advance loan is paid off by the designated deadline, the homeowner pays no interest other than a modest servicing fee. If the tax credit advance loan is not paid by the deadline, principal and interest payments to repay the loan over 10 years begin automatically.

All MHDC first-time homebuyer loans are made through a statewide network of certified

lenders, and serviced by U.S. Bank. The MHDC loan programs are available for households with incomes up to $85,500. Interested first-time homebuyers can find a list of participating lenders and other information about the program on the MHDC website (www.mhdc.com).

MISSOURI HOUSING DEVELOPMENT COMMISSION

Strength, Dignity, Quality of Life

3435 Broadway, Kansas City, MO 64111

Kathryn Watts, Government Affairs, 816-759-6824; e-mail kwatts@mhdc.com

MHDC is the state's housing finance agency. The Commission is dedicated to strengthening communities and the lives of Missourians through the financing, development and preservation of affordable housing. MHDC was created by the General Assembly in 1969 and since that time it has invested $5 billion for the development of affordable rental housing and mortgages for first-time homebuyers in Missouri. MHDC functions much like a bank, providing financing directly to borrowers, developers or through a network of private lending institutions. MHDC is one of only three state housing agencies in the nation to receive an issuer credit rating of AA+ from Standard & Poor’s.

The federal tax credit and the MHDC tax credit advance loan program are both currently set to expire June 30, 2009.

###

NOTE TO EDITORS: Media representative questions can be directed to Kathryn Watts,

Government Affairs Liaison, at 816-759-6824 or kwatts@mhdc.com. All other inquiries should be directed to Gregory Spurgeon, Single Family Homeownership Administrator, at 816-759-7228 or gspurgeon@mhdc.com. If you would like to receive this release by e-mail in rich-text format, please email kwatts@mhdc.com and provide us with the appropriate e-mail address.

Someone else is thinking what I am thinking!

I hate to simply rely on other people to say what I am thinking, however this article on MSN is the perfect advice for those who are getting greedy and thinking that rates are going to continue their downward trend.

http://articles.moneycentral.msn.com/Banking/HomeFinancing/dont-wait-nows-time-to-refinance.aspx

Just because your neighbor got a certain rate does not mean you will get the same rate either better or worse. The days of a simple rate are long gone. Your FICO, loan amount, amount of equity in your home, type of loan, and many other factors will determine your rate. Take the time now to get a "Mortgage Fitness Checkup" to see what is the best plan for you and your financial future!

Time to get back at it!

So I disappeared for a while as I tried to work through the holiday season. Just prior to Thanksgiving rates started falling we saw refinance activity begin to pick up. Then on December 15, 2008 we saw a huge rally on mortgage backed securities push the 30 year down to historic lows. Some were lucky enough to lock in at 4.75%. That lasted for all of 2 1/2 hours and then investors pulled pricing and rates went back above 5%. Since then we have seen little drops followed by upward pressure keeping the 30 year around 5.25%. Still lower than 2003 and now we have this news:
http://www.marketwatch.com/news/story/Banks-rise-Fed-details-planned/story.aspx?guid={EA305A84-90F7-44BF-8DF3-B0DD3687F789}&dist=hpts
Going into 2009 there will be more pressure to push the rates down to 5% or below. There is not a target number that the Fed is releasing for where they want rates, but you can be assured there will be more days like December 15, 2008 in the future.

For those wanting to take advantage of these rates I highly recommend talking to your mortgage professional and getting your application completed and all closing costs agreed upon ahead of time. Put a plan in place to lock at a rate that makes sense and then when the opportunity arrives for you to lock in to the rate it only takes a few minutes and you are locked in. Keep in mind when these opportunities arise, they don't last for days. The market or investors only want so much exposure and once they get their fill, they will pull that pricing. We never know how long it will last. Those that are prepared are the ones that benefit the most.

Have a safe and Happy New Year!