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October 30, 2014

FOMC Announced the End of QE3 (November)

Yesterday the FOMC announced the end ofQE3 (November) stating that the under-utilization in the labor market is gradually diminishing
Provided By
 and that 
the Fed will likely maintain the 0-1/4% target Fed FundsRate for a considerable time. They recognized that inflation continues to run below their long-run goals and that recovery in the housing sector remains slow, but believe that the overall economic trend is improving. With the timing of rate hikes being largely data dependent, and the modestly hawkish statement released yesterday, we anticipate less Fed dependent pricing in the long end of the curve and the introduction of an element of volatility that has been suppressed in recent years ashedge conscious buyers enter the MBSpurchase space. GDP increased at an annual rate of +3.5% in the third quarter of 2014, following a +4.6% GDP print in the second quarter. The increase in real GDP in the third quarter can be attributed to positive contributions from personal consumption expenditures (+1.8%), exports (+7.8%), non-residential fixed investment (+5.5%), federal government spending (+10.0%), and state and local government spending (+1.3%). Initial Jobless Claims rose to 287K vs. 283K prior (consensus 285K) andContinuing Claims rose to 2384K vs. 2351K prior (consensus 2352K). Although claimsincreased last week, the monthly trend is still at 14 year lows, a sign that the labor market is strengthening. The curve has bull flattenedwith 2s10s down -2.8 bps and MBS is under-performing treasury hedges by 1.5-2ticks.
This Week's Events:
10/30InitialJobless Claims05:30October 25285K287K283K284K
10/30Continuing Claims05:30October 182352K2384K2351K2355K
10/30GDPAnnualizedQoQ05:303Q A3.00%3.50%4.60%-
10/30Personal Consumption05:303Q A1.90%1.80%2.50%-
10/31Personal Income05:30September0.30%-0.30%-
10/31Personal Spending05:30September0.10%-0.50%-

October 24, 2014

New Home Sales Surged +18.0% In August

New Home sales surged +18.0% in August to a much higher-than-expected annual rate of 504K, the biggest monthly increase since January 1992. Consensus for September New Home Sales is for a decline of -6.8% to 470K (YoY). Treasuriesare opening slightly higher this morning with MBS 1-2 ticks tighter to treasuryhedges, and the curve has bull flattenedwith 2s10s down -1.7 bps.

Provided by SWMC

October 23, 2014

Lenders Still Bending Rules, Borrowers Still Not Shopping

This article will help homeowners:
Understand the purpose of the good faith estimate (GFE);
Understand the mortgage broker’s role in explaining to a borrower how to use the GFE; and
Review the changes made with the proposed integrated GFE/Reg Z disclosures.

The good faith estimate is designed for shopping around
Within three days after a borrower’s loan application is first submitted to a mortgage lender, the lender must prepare and hand the borrower an accurate good faith estimate (GFE) of closing costs. The estimates are required by the Real Estate Settlement and Procedures Act (RESPA). [12 CFR §1024.7(a)(1)]

RESPA regulations on use of the GFE are designed primarily to eliminate increases in lender fees at the time of closing, not at the time of the estimate. The binding GFE is meant to give borrowers an accurate portrait of what they will be obligated to pay to obtain a mortgage. HUD created more rigorous standards for the GFE in order to allow borrowers the opportunity to choose a loan fully knowing what they are getting into and what the competition has to offer, which will hopefully reduce the amount of homeowners who are trapped paying costs they claim were never disclosed.

The continued effort of the industry, and regulators, is to craft a better GFE. Their goal is two-fold:
make it easier for borrowers to shop around and be able to readily compare several loan offers before committing to any single loan; and give borrowers a tool they can use to compare the costs initially disclosed by the lender with the final settlement charges reflected on the HUD-1 statement to ensure the borrower is not surprised with a disadvantageous loan term at closing.

But how is the GFE being used in practice?

Lenders still bending rules, borrowers still not shopping

The GFE, given to borrowers within three days of submitting their home loan application, is prohibited from exceeding 10% of the final closing costs, otherwise lenders pay the difference. However, some lenders purposefully over quote their estimates to ensure the final number is within the required 10% range.

After meeting with CFPB staff in 2011, the American Land Title Association (ALTA), one of the nation’s largest title insurance trade associations, performed a survey in April of 2012 regarding the accuracy of the GFEs their members observed.

Of the 205 closing agents who responded, nearly 75% have observed lenders over quote their GFEs and pad them with estimates for general services like “document preparation” and “warehouse fees” which don’t make it to the final statement. More than half of the agents surveyed reported being pressured to cut their own fees in order for the lender to make it within the 10% buffer.
Further, 75% of respondents indicated borrowers receive more than one GFE from a single lender, thereby confusing borrowers.

Two thirds of agents surveyed claimed lenders do not attach the list of closing service providers, which would encourage borrowers to shop around for the most competitive rates. Likewise, 75% of agents observed borrowers do not shop around for title and escrow services.

And it’s not just a one-sided failure: borrowers aren’t doing everything they can to protect their own interests. More than half do not even use the GFE they received to compare it to the HUD-1 Settlement Statement

While ALTA’s informal survey was not statistically large, its findings indicate that continued effort is required to both make these forms more visible to the inexperienced borrowing public, and more restrictive on lenders. [ALTA Comment Letter to CFPB’s Ben Olson Summarizing Results of the GFE Survey, April 12, 2012.]

October 17, 2014

Mortgage and Foreclosure Scams | Housing - Avoiding Foreclosure

Housing - Avoiding Foreclosure

If you miss your mortgage payments, you may lose your home through foreclosure. Your lender can use foreclosure as a legal means to repossess your home. If you owe more than your property is worth, a deficiency judgment is pursued. Both foreclosures and deficiency judgments have a negative impact on your future credit. You should avoid foreclosure if at all possible.
These steps can help:
  • Do not ignore the letters from your lender. If you're having problems making your payments, call or write to your lender's loss mitigation department immediately. Explain your situation. Be prepared to provide them with financial information, such as your monthly income and expenses, loan documents/ type of mortgage, tax returns, the amount of equity in your home. Without this information, they may not be able to help.
  • Stay in your home for now. You may not qualify for assistance if you abandon your property.For example, the Hope for Homeowners program only offers 30-year fixed-rate mortgages to owner occupiers.
  • Contact a HUD-approved housing counseling agency. Call 1-800-569-4287 or TDD 1-800-877-8339 for the housing counseling agency nearest you. These agencies are valuable resources.
HUD counselors frequently have information on services and programs offered by government agencies as well as private and community organizations that could help you. The housing counseling agency may also offer credit counseling. These services are usually free of charge.

Mortgage and Foreclosure Scams

Most mortgage professionals are trustworthy and provide a valuable service by allowing families to own a home without saving enough money to buy it outright. But dishonest or "predatory" lenders do exist and engage in lending practices that increase the chances that a borrower will lose a home to foreclosure. Some abusive practices include:
  • Lease-back or rent-to-buy scams: You are asked to transfer the title to your home "temporarily" to the scam artist who promises to obtain better financing for your mortgage and allow you to stay in your home as a renter with the option to purchase the home back. However, if you do not comply with the terms of the rent-to-buy agreement, you will lose your money and be evicted like any other tenant.
  • Fake "government" modification programs: These scams claim to be affiliated with the government or require that you pay high fees in order to benefit from government modification programs. Remember that you do not have to pay any fees to participate in government-approved programs. Some frauds may even use words like "federal" or "government-approved" or acquire website names that make consumers think they are associated with the government.
  • Refinance fraud: The scam artist offers to be an intermediary between you and your mortgage lender to negotiate a loan modification. The scam artist may even instruct you to make payments directly to him or her, which the scammer will send to the lender. However, the scam artist will not forward the payments to your lender and you could still lose your home.
  • "Eliminate your debt" claims: Some companies may make false legal claims that you are not required to repay your mortgage or that they know of "secret laws" that can eliminate your debt. Do not believe these claims.
  • Refinance scams: You are encouraged to sign "foreclosure rescue" loan documents to refinance your loan. In reality, you have surrendered ownership of your home because the loan documents are actually deed transfer documents. You may falsely believe that your home has been saved from foreclosure until you receive an eviction notice months or even years later.

Beware of Foreclosure Rescue Scams-Help is Free

  • Beware of anyone who asks you to pay a fee in exchange for a counseling service or modification of a delinquent loan.
  • Scam artists often target homeowners who are struggling to meet their mortgage commitment or are anxious to sell their homes. Recognize and avoid common scams.
  • Beware of people who pressure you to sign papers immediately or who try to convince you that they can save your home if you sign or transfer the deed to your house over to them.
  • Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

Making Home Affordable

The Making Home Affordable Program offers opportunities to modify or refinance your mortgage to make your monthly payments more affordable. It also includes the Home Affordable Foreclosure Alternatives Program for homeowners who are interested in a short sale or deed-in-lieu of foreclosure. E-mail or call the Home Loan Helpline, 1-855-995-SOEZ (7639).

October 3, 2014

Short Sale - Foreclosure - Chapter 7 BK - Chapter 13 BK - What Are My Options?

Seasoning: Financial Miss-Manage.:4 Yrs
Extenuating circumst.: 2 Yrs Max 90% LTV
Evaluated by LP
4  Years from
 completion date
7 Yrs from completion date
4 Yrs from discharge or dismissal date
2 Yrs from discharge date 4 Yrs from dismissal date
Permitted with mtg/installment OX30 for 12 months prior to short sale. 3 yrs if in default.
3 Yrs from completion date, exceptions with extenuating circumstances
2 Yrs from discharge date, but not less than 12 Months w/ extenuating circumstances
1 Yr of payout must elapse & payment performance must be satisfactory; Must receive permission from court to enter into
a mortgage
Permitted with mtg/installment OX30 for 12 months prior to short sale. 3 yrs if in default.
3 Yrs from completion date
with AUS Refer
2 Yrs from discharge date with AUS Refer
3 Years from completion date

Refer to specific Jumbo guidelines

Information provided by So EZ Mortgage.