Michigan Mortgage Pulse

27 Jan, 2014

2 Weeks Into Qualified Mortgage-What The Underwriters Are Saying

There has been so much speculation into what the new Qualified Mortgage-Ability to Repay (QM-ATR) rules will bring to our industry. Predictions ran the gamut, from “this will crush our business” to “this is no big deal” and everything in between. We are now a little more than two weeks into the new guidance, & as is often the case, the practical truth seems to lie somewhere in the middle. Granted, this is all still very new from an operational standpoint, but here are some things that we can put in the “truth” column, when evaluating “truth vs. myth”. Borrowers...

rates

21 Jan, 2014

Mortgage Rate Update; January 21st, 2014

Mortgage rates have retreated from their highs of earlier this month. The U.S. Treasury 10 year note, often viewed as a benchmark for interest rates is presently at a six week low. The consensus seems to be that although the economy is improving, it is improving at a rather anemic pace. The Federal Open Market Committee (FOMC) meets on January 28th & 29th. Fed watchers will be on alert to see if the Federal Reserve will continue it’s tapering efforts in light of the slow economic growth. Rates for a 30 year fixed rate loan are closer to 4.50%, & the...

mortgage

13 Jan, 2014

Mortgage Debt Forgiveness NOT Extended into 2014 as of This Date!

As 2014 moves forward, a very important piece of legislation hangs in limbo. As noted in my earlier post, “Keep Your CPA Close and your Congressman Closer“, the Mortgage Debt Forgiveness Act has expired as of December 31st, 2013. This means that someone that will experience a foreclosure or short sale in 2014 may have to pay income tax on the portion of debt that has been forgiven. Here is an example: Let’s say someone sells a home for $150,000, but owes $200,000 on their mortgage. If the seller cannot pay the $50,000 shortfall, the lender may “forgive” this $50,000...

market / mortgage / purchase financing / rates

2 Jan, 2014

The Road Ahead: Home Finance in 2014

2013 is now behind us, and with 2014 underway, what kind of changes can we expect in home finance? The short answer: more regulatory hurdles, more due diligence by lenders, & somewhat higher interest rates & costs. What a way to start the new year! It is not all bad news though. It is important to keep perspective with regard to these changes, & there is no reason that folks should be frightened away from a home purchase. For many borrowers, the extra due diligence & regulations will be transparent, & will have minimal impact on their loan application. Over...

market / mortgage / rates

19 Dec, 2013

Mortgage Rate Update; December 19th, 2013

Mortgage rates are up slightly this week, in response to the Federal Reserve’s decision to “taper” their bond purchase program that has been in place for some time now. The Fed had been doing this in an effort to keep interest rates low & to help strengthen the economy. A 30 year fixed rate loan with “0” points is now in the high 4% range, while a 15 year rate is hovering right around 4.0%. This news from the Fed, while it does result in somewhat higher rates, is not all bad news for those of us interested in housing....

market / mortgage / rates

13 Dec, 2013

Mortgage Rate Update – December 13th, 2013

Interest rates were flat to slightly higher throughout this past week. A 30 year fixed rate loan with no points being charged is still in the mid to higher 4% range, while 15 year fixed rate loans are just under 4%. Markets appear to be awaiting the outcome next week’s Federal Reserve meeting, which will wrap up on Wednesday, December 18th. There is again the idea that the Fed will begin cutting back it’s bond buying program, in which the Federal Reserve purchases over $80 billion in treasury securities. These purchases help to spur the economy by keeping interest rates low. If there is...

mortgage

10 Dec, 2013

Dear Lender, Why Does my “No Cost” Mortgage cost $8,774.33?

Any smart consumer knows that the adage “no free lunch” applies to almost everything in life. Acquiring a mortgage is no exception. However, one doesn’t have to go very far to find very exciting ads shouting “NO CLOSING COSTS!!” Who wouldn’t be intrigued by such a message? After all, obtaining a mortgage is expensive. Quotes from lenders for a typical $200,000 mortgage will reflect $2,000 to $3,000 in total closing costs, so “no closing costs” sure sounds appealing. So what’s the catch? There really isn’t a “catch” per se, but a consumer certainly needs to stay informed on how all of...

mortgage

6 Dec, 2013

2014 Foreclosure or Short Sale? Keep your CPA Close and your Congressman Closer

In 2007, the Mortgage Debt Forgiveness Act was passed. Prior to this, the IRS viewed a cancelled or “forgiven” debt as taxable income. The 2007 Act gave relief to homeowners that experienced a foreclosure or short sale. As an example, if someone owes $200,000 on a home, but the home was sold via short sale for $150,000, then the $50,000 that went unpaid was considered “cancelled debt”. Prior to the Mortgage Debt Forgiveness Act, that homeowner would have had to treat that $50,000 as income when they completed their taxes! The Act permits, in most cases, for that “income” to...

purchase financing

5 Dec, 2013

4 Things a Real Estate Professional Can Do to Ensure a Smooth Financing Process

“How can I make my transactions go more smoothly & avoid last minute requests?” Unlike the graphic to the left, magic and wizardry are not on my “top four” list! However, I think sometimes we all want to reach for that “magic wand” to get our real estate transactions to the finish line. Seasoned agents will sometimes say “back in the day, I gave a loan officer the contact, & told him to call me when the closing is set”. We are in very different times these days, & real estate transactions need proper management from start to finish to...

market / rates

5 Dec, 2013

Interest Rate Update

Interest rates rose slightly this week on the heels of some upbeat economic news. Investors are showing signs of fear that the Federal Reserve will scale back monthly bond purchases designed to help boost the economy. The bond purchases have helped keep interest rates low and have been used as a tool by the Fed to help bolster the economy. That said, mortgage interest rates remain attractive, with 30 year fixed rate loans available in the high 4% range, & 15 year fixed rate loans available at just under 4%. A great deal of economic data is due out this...