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December 16, 2019

IMPORTANT READ - Freddie Mac Predicts Lower Rates in the Next Two Years

I, Michael James Hansen, licensed loan officer for 10 years now, highly recommend not paying closing cost unless you have to, or you can recoup it in less than 2 years. 

This is not a hunch, or an assumption, this is a prediction based on information.

VA Funding Fee Increase

New Loan Limits - New Loan To Value Limits - New Rates - New Mortgages for CALIFORNIA and ARIZONA

First Lets Talk New Loan To Value without MI for Investment and Primary Homes. 

This is huge!!! Riverside County and San Diego, to name a couple, huge benefit!

$850k purchase price, 10% down financing $765k with no Mortgage Insurance!
The rate is 4.625% but that’s not bad…. Payment would be $3933 P/I

Now is the time to take advantage of this, keep in mind, this is not for cashout refi only purchase and rate and term refinances.


Our High Balance Nationwide program was created to help you offer you conventional pricing and turn times on loans that would otherwise be Jumbo — and now we’re expanding it. Starting today, High Balance Nationwide goes to 90% LTV on regular rate and term refinances and purchases, plus we’re including investment properties up to 80% LTV.
  • Loan amounts from $510,401 to $765,600
  • Minimum 680 FICO
  • 30-year fixed term only
  • Escrow waivers up to 90% LTV (80% LTV in NM)
  • Easier guidelines, better pricing and faster turn times than Jumbo loans
If you haven’t taken advantage of our High Balance Nationwide program, now is a great time to start. For additional details or if you have any questions, call me on my direct line at 714-684-6903 or email me at or

Second Lets Talk New Rates

Fed Announcement as Underwhelming as Expected
Update Issued: 12/11/2019 2:05 PM
Bonds are little-changed so far.  If there's been any reaction, it's slightly weaker.  More on that in the next update.  For now, here are the bullet points:
And here are the updated economic projections:
  • AT END-2020 1.6% (PREV 1.9%)
  • AT END-2021 1.9% (PREV 2.1%)
  • AT END-2022 2.1% (PREV 2.4%)
  • IN LONGER RUN 2.5% (PREV 2.5%)

November 8, 2019

The Day Ahead: Lowered Expectations

Lowered Expectations
The Day Ahead | 9:10AM
By: Matthew Graham

If you don't expect anything good to happen for the bond market for the next few months, I guarantee you won't be disappointed.  If, however, you expect to see a normal amount of resilience and a continued willingness on the part of rates to operate with a 3% handle in the 30yr fixed mortgage world, I cannot make that same guarantee.

Grim stuff, I realize, but fortunes wax and wane when it comes to big-picture bond market momentum.  Fortunes waxed bigtime throughout 2019 and it increasingly looks like the bill is due.  If you're new to my commentary, this narrative has been in place since mid October when rates failed to make it back to September's lows.

All of the above having been said, I can't unequivocally guarantee that we've entered a new rising rate trend that will last at least another several months (here's why it would last that long).  The trade deal could still take a turn for the worse.  More importantly, global economic data could still slide for other reasons.  Or an unforeseen risk could emerge that rebalances the outlook for bonds more quickly than past precedent would suggest.  All I can tell you is that the risk that we've entered a rising rate trend for at least a few more months is bigger than the risk of any of that other stuff derailing such a trend.

1.90-1.94 remains an important zone, yes, but we also can't draw conclusions as firmly as we otherwise might due to the 3-day weekend.  The 3-day weekend means there's 50% more time between today's close and the next trading day in the US for trade headlines to have unexpected impacts, and traders could simply be that much more defensive until next Tuesday rolls around.  That's not something I would flat-out count on in terms of justifying floating over the weekend.  We're definitely in a lock-biased stance and have been since early October.  But it offers a glimmer of hope against an otherwise bleak short-term backdrop.

Lastly, here's yesterday's chart again, as I think it bears repeating for anyone who doesn't understand why I'm saying "at least several more months of weakness" is a baseline scenario.  Each of the highlighted sections shows what has happened after every big picture rally of more than 100bps in 10yr yields.

November 6, 2019

100% Financing Available - Values Are Strong In The USA

Why use Michael Hansen, with Optimum First Mortgage as your second mortgage lender?

1. Combined Loan To Value up to 100% and credit scores as low as 640
2. Debt To Income up to 50%*
3. Use prior appraisal up to 12 months old
4. No seasoning after purchase up to 95% CLTV. Use purchase price for value.

October 29, 2019

Is Prepaid Interest A Closing Cost

Answer: No! The regulators are not doing you any favors by grouping daily interest that we all pay weather we refinance or not, into the closing cost section. They are just adding more confusion to an already confusing choice.

You pay interest for every day that you are borrowing the funds for your home. When you refinance your home, you skip a payment every time. However you cannot skip the interest portion of that payment. So pre paid interest is not a cost, its something you pay daily already, its just switching to a new lender, and since you wont be making a payment to them that you would normally pay your old lender, you will pay it in closing, but only the interest portion of it.

If you make a payment on the first of November, that pays for the interest from Oct 1st to Oct 31st because mortgages are paid in arrears. If your new loan funds on the 20th of Oct, you will have 11 days of pre paid interest. This money will go to the new lender, and your first payment wont be due until December 1st. You will also pay interest from the first of Oct to the 20th of Oct in addition to your principle balance on your most recent statement to your old lender.

Skip Nov, pay interest to your old and new lender for Oct and double interest for one day, the day it funds.


If you let the lender pay your taxes and insurance installments for you, you will have to deposit funds into your new escrow/impound account. We cannot transfer your existing escrow/impound account balance from your old lender so you will get that money refunded to you by your old lender after we pay them off. 

The amount is determined by a formula used to collect enough funds from you so the lender will have sufficient funds to pay your home owners insurance premium and property tax bills when due + one extra month. After you make 12 payments, the servicer will reconcile your escrow account and send you back any overage, so we will no longer have one moth extra after sending you the overage. 

We also pay the bills in the month before we get your payment, so it seems like two extra months. For example Oct 1st tax bill, we are going to pay it before you make your Oct payment. If you fund in Oct, we are going to collect 4 months of taxes + Oct 1st tax installment and here is why. The next payment is due March 1st, your first payment will be due by Dec 15th. You pay Dec, Jan, Feb, we make the payment to the tax collector. That is 7 months you put in and 6 months we are sending out, leaving us with the one month overage. 

If you have further questions about this, you can email me questions anytime at or call me directly at 714-684-6903. 

Alan Greenspan says it’s ‘only a matter of time’ before negative rates spread to the US

It will not be long before the spread of negative interest rates reaches the U.S., former Federal Reserve Chairman Alan Greenspan said.

“You’re seeing it pretty much throughout the world. It’s only a matter of time before it’s more in the United States,” Greenspan told CNBC’s “Squawk on the Street” on Wednesday, adding investors should watch the 30-year Treasury yield.

The 30-year U.S. rate traded at 1.95% midday Wednesday. It reached an all-time low last week.

There are currently more than $16 trillion in negative-yielding debt instruments around the world as central banks try to ease monetary conditions to sustain the global economy. The 10-year sovereign bonds in Belgium, Germany, France and Japan — among others — are trading with a negative rate.

U.S. Treasury yields are still well within positive territory, but the Fed has already cut rates once this year and is expected to ease later this month. Market expectations for a rate cut in September are at 92.7%, according to the CME Group’s FedWatch tool.

What the ‘Predictably Irrational’ author says not to do when the stock market tanks
An aging population is driving demand for bonds, pushing their yields lower, Greenspan said.

“We’re so used to the idea that we don’t have negative
interest rates, but if you get a significant change in the attitude of the population, they look for coupon,” Greenspan said. “As a result of that, there’s a tendency to disregard the fact that that has an effect in the net interest rate that they receive.”

He added that gold prices have been surging recently because people are looking for “hard” assets they know are going to have value down the road as the population ages. Gold futures are up more than 21% in 2019 and are trading around levels not seen since 2013.

Greenspan’s comments come after New York Fed President John Williams called low inflation the “problem of this era” in a speech earlier in the day.

Optimum First Mortgage Partner, Flagstar Bank, Disposes of Live Well Financial Exposure

Flagstar Bank is a wholesale mortgage partner with Optimum First Mortgage. After disclosing that it had endured a $74 million financial exposure in the wake of Live Well Financial’s abrupt closure this past May, Flagstar Bancorp has announced that it has now shed all of the securities that served as collateral for its loan to the now-defunct reverse mortgage lender.

Flagstar detailed that the burden of the exposure has been overcome while Flagstar itself continues cooperating with authorities seeking fraud charges against both Live Well at-large and its former CEO, Michael Hild, specifically. The announcement was made in a press release issued last week, which announced the sale of the affected assets.

“I am very pleased to have put this situation behind us,” said Alessandro DiNello, Flagstar president and chief executive officer in the press release. “Criminal and civil legal proceedings are progressing as expected against Live Well and its principals. We continue to cooperate with prosecutors and the SEC, and will otherwise actively pursue all legal remedies available to us.”

Flagstar first publicly disclosed that it endured the financial exposure just over a week after Live Well abruptly closed its doors, stating its plan to “pursue all available sources of collection including other assets of the company, a personal guarantee and other legal remedies to minimize our credit exposure related to this loan,” according to a 10-Q filing with the Securities and Exchange Commission (SEC)
in May.

Later that month, Flagstar filed suit against Live Well, seeking direct repayment. Shortly before federal authorities arrested former Live Well CEO Hild on charges of securities fraud in August, Flagstar won approval in bankruptcy court to take control of a $37 million bond account that Live Well had owned. That bond account comprised over half of what Flagstar was owed by the reverse mortgage lender, culminating in the sale of the remainder of the collateral last week.

This is the latest development in the ongoing story related to the abrupt closure of Live Well Financial. In addition to arresting Hild, federal authorities also charged two other former Live Well executives with similar charges, and they are reportedly cooperating with investigators. Hild was released from custody shortly after his arrest on an unsecured $500,000 bond.

After a subsequent court appearance, Hild has pleaded ‘not guilty’ to the charges against him, and a federal judge has set a trial date for October, 2020.

Due to its origination volume prior to closing, Live Well Financial is still technically a top 10 reverse mortgage originator for 2019 based on August endorsement data compiled by Reverse Market Insight (RMI). It was ranked at number 8 as of August with 892 endorsements over the prior 12 months.

September 30, 2019

A Penny Saved Is A Mortgage Paid

I was notified by one of my long time clients that he was sending his last payment that day and paid off his mortgage. He had a great rate, under 3% to help him pay it off quicker, but the question is, how did he get such a great rate?

I would say 80% of it was being savvy, the other 20% was having a scenario that allowed for the lowest rates, like high credit score, 40% equity, single family home and shorter term than the standard 30.

How was he savvy? If he could get a lower rate for free, he took it, and instead of  just paying the minimum payment at the new rate, he paid the same higher payment that he used to pay. Basically taking the savings and using it to pay off the loan faster. He accelerated his payments with as much as he could monthly.

Now, he says, instead of making payments to the lender, he makes payments to himself and it's just as easy as it sounds. 

Is The Economy Headed Towards A Depression?

Almost every client that talks to me lately asks, what is going on with rates? Are they going down, up or flat?

I believe when a group of individuals averages their guesses, the result is more accurate than an experts opinion. There was a study conducted that showed a group of people that don't know anything about guessing a cows weight, was able to guess a cows weight whiten 95% accuracy, while a single individual who was an expert at guessing a cows weight varied but was off by more than 20% in many cases.

Most of the people that call in about mortgages believe that rates are going to fall for the rest of this year and possibly late into the first quarter of next year. If that's true then you're best bet is to refinance now at the lowest rate for free, if you can get one lower than what you have now by at least 0.25%. Since if you wait until the end of the year to refinance, and rates are at the lowest in the first quarter of next year, you will be waiting for your 6th payment to post before you can refinance your loan and you could miss out on the lowest rates in history, at least until the next rate drop. 

There is even speculation that we will be in a depression during the year 2021. One major factor contributing to this would be incomes not able to meet the requirements to afford a home for new home owners, and jobs being lost to mass automation. Uber is preaching that they will be completely free of human drivers that year. Tesla is advertising that the buyers who paid for the upgrade when purchasing the car, around $4k-$6k and going up in price, will be able to drive fully autonomously on January 1st, 2020.

There are billions of jobs that will be replaced in the next couple years, the world is changing and the market will be changing with it. I predict that rates will continue to fall with small pockets of rising until they are negative. Negative rates, how is this possible, you ask? The same way 0% rates work on BMW's.

It's that easy and there is already trillions of dollars in debt being borrowed all around the highly developed world.

I would like to end with the note, that although this sounds like great news for us home owners who love to see their equity rise, and we know how lower rates helps that happen, it also may not. I would not bank on lower rates happening, they could go up for years to come and paying for a lower rate could be your best move right now.

August 14, 2019

How To Get An Appraisal Waiver

Appraisal Waivers
Fact Sheet

Does every loan delivered to Fannie Mae require an appraisal? What if we have a recent appraisal on file? In somecases, we may be willing towaive the appraisal for certain transactions.
Fannie Mae’s appraisal waiver offers are issued through Desktop Underwriter®
(DU®) for eligible transactions using Fannie Mae’s database of more than 31 million appraisal reports in combination with proprietary analytics from
Collateral Underwriter®(CU®).

How it works

Appraisal waivers are available to all lenders through DU. There are no prerequisites and no registration process.When a DU loan case file receives an appraisal waiver offer and it is exercised by the lender, Fannie Mae accepts the value estimate submitted by the lender as the market value for the subject property and provides relief from enforcement of representations and warranties on the value, condition, and marketability of the property. The lender is required to represent and warrant that the data (other than the value estimate) submitted to DU is complete and accurate, and lenders must order an appraisal if they have reason to believe that an appraisal is warranted based on additional
information the lender has about the property or subsequent events.
The majority of transactions will not receive an appraisal waiver offer, which means they require an appraisal by a qualified residential appraiser to establish the market value.
This summary is intended for reference only. All criteria are subject to the formal terms and conditions of the Fannie Mae Selling Guide. In the event of any conflict with this document, the Selling Guide will govern.


August 4, 2019

Completely Free Credit Report

The only recognized online source for obtaining a completely free copy of your credit report is

10-year Treasury yield drops to lowest level since 2016, dipping further below 2%

The yield on the benchmark 10-year Treasury note fell to its lowest level since November 2016 on Wednesday, continuing its slide below 2% on expectations central banks around the world would respond to a slowing global economy with more monetary stimulus.

At around 12:09 p.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.95%, off a low of 1.939% hit in overnight trading. The rate on the 3-month Treasury bill held steady at 2.205%, keeping a portion of the yield curve inverted.

Traders around the world snapped up government debt after the European Council on Tuesday nominated Christine Lagarde to head the European Central Bank. Many viewed the choice of Lagarde as a signal that euro zone rates will remain low for the foreseeable future as the ECB tries to foster inflation and GDP growth in the region.

Europe has seen markedly lower GDP growth relative to that of the U.S. in recent years. Economic forecasts have slumped further in recent months amid persistent tariff pressure from the Trump administration and cooler sentiment from manufacturers. The German 10-year bund fell to its lowest level in recorded history on Wednesday at -0.399%.

“The appointment of Christine Lagarde is certainly giving more adrenaline to the epic bubble of negative yielding bonds but the euro isn’t really moving,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, wrote in an email.

“It remains quite astonishing to see what is going on in European bond yields, to say the least. God help us when this unwinds one day,” he added.

Fears of an economic slowdown in Europe were also exacerbated after the U.S. government on Monday threatened to impose tariffs on $4 billion of additional euro zone goods in a long-running dispute over aircraft subsidies.

The U.S. Trade Representative’s office released a list of products — including Italian cheese, olives and whiskey — that could be targeted with new duties on top of those implemented in April. The new wave of proposed duties comes amid a 15-year dispute at the World Trade Organization over aircraft subsidies given to U.S. aerospace manufacturer Boeing and its European rival, Airbus.

Treasury also caught a bid after President Donald Trump picked two nominees likely to support easier monetary policy at the Federal Reserve. Both of Trump’s intended nominees, Christopher Waller and Judy Shelton, are thought to be advocates of lower rates.

Lower rates could give a boost to job creation, which posted another rough month in June, according to a Wednesday report from ADP and Moody’s Analytics. Private companies added just 102,000 jobs last month, well short of the meager 135,000 estimate. That followed a weak May print of just 41,000 and precede’s Friday’s employment report from the Labor Department.

The Institute for Supply Management’s non-manufacturing index and Services PMI for June and factory orders for May will follow slightly later in the session.

July 30, 2019

How Does Your Credit Score Affect Your Mortgage Eligibility?

Post Series: Credit & Debt

Credit can be a vexing topic for even the most financially savvy consumers. Most people understand that good credit history can improve your chances of qualifying for a loan because it shows the lender you’re likely to repay it.

However, understanding the meaning of your score, how it’s calculated, how it can influence your mortgage eligibility – and the interest rates you pay – is not as easy as it sounds. Below, we break down all of these topics.

Explaining Your Credit Score
The FICO credit score (created by the Fair Isaac Corporation) is one of the most common scores used by lenders to determine your credit worthiness. It’s a component of pricing for the interest rates and fees you’ll pay to get your mortgage.

While exact scoring models may vary by lender, some variation of the standard FICO score is often used as a base. FICO takes different variables on your credit report, such as those listed below, from the three major credit bureaus (Equifax, Experian and TransUnion) to compile your score. Those range from 300 – 850. From this information, they compile a score based on the following factors:

Payment history (35%)
Amount owed (30%)
Length of credit history (15%)
Types of credit (10%)
New credit (10%)
Payment History
Roughly 35% of your credit score is based on your history of timely payments on your debt. If you’ve made your payments on time and in full in the past, there’s a good chance you’ll do the same in the future, so your credit score may be higher. If you’ve had tax liens, late payments, lawsuits or bankruptcies, they can result in a lower credit score.

Amount Owed
Roughly 30% of your score is based on the amount of money you owe. Higher balances tend to lower your credit score, while lower balances can positively impact it.

Length of Credit History
About 15% of your score is calculated on the length of your credit history. Typically, the longer you’ve had open credit accounts, the higher your score can be.

Lacking credit history may not hurt you when it comes to FHA and VA loans, but good credit history is essential when applying for a conventional loan.

Types of Credit
Types of credit determine about 10% of your credit score. This refers to the variety of types on your report, including revolving debt like credit cards and retailer cards as well as installment debt like student loans, auto loans or mortgages. Having a mix of installment and revolving debt can help prove you can handle different types of payments.

New Credit
About 10% of your score is determined by new lines of credit. Opening multiple lines of new credit too quickly can negatively impact your credit score, as it may look like you’re desperate for credit. Asking for multiple lines of credit and receiving multiple credit inquiries also has the potential to hurt your score, even if you don’t end up opening new accounts.

Note that there are two types of credit inquiries – one for lending purposes and one for educational reasons. Inquiries for lending purposes may ding your credit score by a few points. However, getting your credit pulled by a company like Rocket HQ, which shows you your report and score for educational purposes, won’t impact your score.

If you’re shopping around for the best rate or loan terms, don’t worry. Multiple credit inquiries over a short period of time for the same type of loan will be grouped together as one inquiry, so your score won’t be as heavily influenced.

What is the Average Credit Score in the U.S.?
So how does your credit score stack up against others? The average credit score in the United States was 699 in April 2016, according to Experian’s seventh annual State of Credit report. This is a record-high for Americans.

What Credit Score is Needed to Buy a House?
You may be wondering what credit score you need to buy a house. Unfortunately, you may not find an exact answer. There are several factors that go into qualifying for a mortgage besides your credit score. This includes the type of loan you’re applying for as well as your income and debt levels. Because of this, there isn’t an exact number you need to qualify. Some guidelines, however, are listed below:

Conventional Mortgage: 620
FHA Mortgage: 580
Veteran Affairs (VA) Mortgage: While the VA does not have a minimum credit score requirement, Quicken Loans requires a 620 credit score on all VA loans
It’s not only the minimums that matter. A higher credit score will generally qualify you for a lower rate on your mortgage, saving you money.

Conventional Mortgages
Conventional mortgages are home loans that follow the standards set by Fannie Mae and Freddie Mac. They’re uninsured by the government and known for lower down payments and good interest rates. These are typically best for those with good or excellent credit, as these loans require a higher credit score than an FHA loan.

These loans tend to offer the most competitive interest rates and flexible repayment periods, such as 15- and 30-year mortgage terms. While you may pay more money up front, you can save more money over the course of a conventional loan than you would with an FHA loan.

Minimum Credit Score for Conventional Loans
At Quicken Loans, your credit score for a conventional loan must be 620 or higher. Various lenders have different requirements and may require a different score.

FHA Loans
Backed by the Federal Housing Administration, FHA loans are insured by the government, making them easier to qualify for than conventional loans. They offer down payments as low as 3.5% and low-equity refinances, which allow you to refinance up to 97.75% of your home’s value.

FHA loans can benefit borrowers with lower credit scores or those who spend a significant portion of their income on housing. Current homeowners who are underwater on their mortgage – and could lower their monthly payment by refinancing – may also benefit from an FHA loan.

Minimum Credit Score for FHA Loans
The minimum FICO score for an FHA loan through Quicken Loans is 580, with a 3.5% minimum down payment. Other lenders may have different requirements.

For a standard FHA loan, a minimum of one credit score is required to qualify. If your lender obtains all three of your credit scores, they’ll use the middle score for consideration. If you apply for a mortgage with your spouse, lenders will use the lower of the two middle credit scores.

Better Credit Scores Lead to Greater Odds of Getting Approved
It’s important to know your credit score and understand what impacts it before you begin the mortgage process. Once you understand this information, you can begin to positively impact your credit score or maintain it so you can give yourself the best chance of qualifying for a mortgage.

It is possible to qualify for a mortgage with a relatively lower credit score but with high income and low levels of debt. It’s also possible to be turned down for a mortgage if your score is relatively higher, but you have high levels of debt and a lower income. Credit score requirements should be used as a guideline, as debt levels, income and down payments will also be taken into consideration when determining your mortgage eligibility.

Are you ready to start the mortgage process? Contact a Home Loan Expert to get started!