Well, the big development, coming out just today, was that Fannie Mae has chosen to relax it’s standards to allow conventional financing up to 97% even in distressed sales market.  The affect of this new change is that for the past few months, most borrowers had to have a minimum of 5% and many lenders even insisted on 10% down.  Now that Fannie Mae has said they will once again purchase mortgages with conventional financing and only 3% down, borrowers are not forced to get an FHA loan if they are looking for minimum down payment.  That allows them to avoid the 1.5% FHA “funding fee” that must be charged on FHA loans.  Obviously, these borrowers will still have monthly mortgage insurance but they are allowed higher purchase prices than FHA allows.   All in all, a good Loan Consultant can still help to guide perspective borrowers into the right choice for them.

The other big piece of news today was that Consumer Confidence has dropped to a low not seen since the Carter administration.  This is most likely due to the fact that consumers at large feel that there is still more difficulty coming in the economic markets. 

My summary??  Rates are still really good.  The thing that is stopping most borrowers is that there is now a shortage of ‘niche’ programs that fit borrowers that do not fit conventional guidelines.  While I understand that many programs should not have been so easy, I think there needs to be a balace that can accomodate those that are not conventional but still good credit risks.  Until we begin to see some of those programs coming back, difficulties will continue. 

If I can be of any help to you, please do not hesitate to call/email me!!

Well, yesterday for about 1 hour, rates were so good that you could hardly believe your eyes!!  You could get an FHA rate with no points for around 5.5%.  Then, before you could even get someone on the phone to lock a rate, the rates went up, up, up with an average total of 4 price changes for every bank during the day (and some banks just refusing to lock for the rest of the day)!  Every time you wanted to lock, you received notification that the rates had risen again and you had to wait for the new rates.  It was enough to make the loan specialists like me crawl under a rock!!!  The fun didn’t end there either, today the ride continued with further rate hikes and in the end, rates were worse than they were a few weeks ago. 

The reason for the recap is this.  Many of my clients would like to know how to tell, from the stock market updates, what rates are doing.  One VERY GENERAL rule of thumb is, if the stock market is having an especially good day, there is a good chance that the rates are having a bad day and vice versa.  Many factors contribute to this including the bond market and how money is moved back and forth.  However, the general rule is that the mortgage rates and stocks have an inverse relationship.  SO, is hope lost?

Of course not, 76% of all traders are still predicting another Fed rate cut and the rates are still incredibly good.  Those looking to purchase or refinance a home still have the chance to make their money go farther.  Also, part of the stimulus package agreed upon by our Washington leaders today includes raising the allowable loan limit for FHA loans and allowing Fannie Mae and Freddie Mac to purchase loans that, until now, have been considered too large or “Jumbo”. 

So, all in all there was a lot of mixed news this week.  As always, stay tuned for more and we will try to keep you informed!