It looks like you're new here. I appreciate you stopping by! Feel free to throw down some graffiti on my wall by adding a comment to this post! And, if you like what you see, please subscribe to the feed and I'll deliver all my new content, right to you! Thanks for visiting!

We’ve been getting many questions on the Fannie Mae/Freddie Mac seizures by the U.S. Government.  Here is some information to help get your arms around the situation.

This from the Wall Street Journal

U.S. Seizes Mortgage Giants

Government Ousts CEOs of Fannie, Freddie;
Promises Up to $200 Billion in Capital
By JAMES R. HAGERTY, RUTH SIMON and DAMIAN PALETTA
September 8, 2008 11:31 a.m.

In its most dramatic market intervention in years, the U.S. government seized two of the nation’s largest financial companies, taking direct responsibility for firms that provide funding for around three-quarters of new home mortgages.

Treasury Secretary Henry Paulson announced plans Sunday to take control of troubled mortgage giants Fannie Mae and Freddie Mac and replace the companies’ chief executives.
Mr. Paulson on Monday said in a CNBC interview that the government’s takeover was necessary, but it was “not something I wanted to do.” …

The Treasury will acquire $1 billion of

(more…)

Fannie Mae has announced that they are lowering the maximum loan-to-value (LTV) ratios for a number of loan types. The three changes that will have the most impact follow:

Principal residence, cash-out refinance: Current max is 90%, new max is 85%. This means that if you refinance your primary residence, you can’t get more than 85% of the value if it’s a cash-out transaction.

Investment property purchase: Current LTV max is 90%, new max is 85%. This means purchasers of investment properties will need 15% down.

Investment property refinances (all types): Current max LTV is 90% for rate and term refinances and 85% for cash-out refi’s, new max is 75% for both. This means the most you can get with an investment property refi is 75% of the value.

The changes are not in effect yet for loans that are run through Fannie Mae’s automated underwriting system, and Fannie Mae has not announced when they will upgrade their underwriting software. They usually make upgrades relatively soon after making announcements.

With the bailout of Fannie Mae and Freddie Mac, there are sure to be some changes in a variety of areas.

Stay tuned. We will have follow up information when available.

Rates have been slowly improving.  Energy prices are coming down, and inflationary pressures continue to subside.  Denver area real estate prices are holding their own, and this is a good time to buy!  These rates can change multiple times daily, so be sure to check with us regarding the mortgage markets!

The Douglas County Housing Partnership (DCHP) has a great program called the “Shared Equity Agreement Program.”  This program gives home buyers an equity “partner” in their home purchase.

The biggest requirement is that to qualify, the buyer must work and purchase in Douglas County. Visit the DCHP website for more information.

Here is an overview of the program, from the DCHP:

What is It?

Opportunity for homeownership in Douglas County through use of “Shared Equity” with the Housing Partnership. DCHP will provide funds in the form of down payment and will provide the minimum amount necessary to bridge lender requirements and resources available to the buyer up to 20% of the purchase price or $50,000 whichever is smaller.

This down payment will be a

(more…)

GOOD NEWS for the Colorado Market… act now before it’s too late

For Colorado as a whole, prices rose by 1.82% in the past year and by 0.32% in the second quarter please see the attached article from the Denver Business Journal for more detail.

As a mortgage professional in the industry I have the opportunity to talk with all parties involved in the transaction- both buyers and sellers and Realtors. The vibe is positive out there. People are feeling good about the inventory going down and the increased number of “SOLD” signs in their neighborhoods.

As rates remain in the low 6’s for a 30 year fixed mortgage it is a wonderful time to take advantage of Real Estate in Denver. Consult your Realtor and your Mortgage Professional on how to buy with 0% down before the down payment assistance programs are no longer available.

Seller funded down payment assistance programs

will be available until September 30, 2008.

YES- we can close the loan this fast!

First-time buyers and people who have not owned a home in the past three years may get a $7,500 tax credit if they purchase a home on or after April 9, 2008 or if they purchase one before July 1, 2009.

Please feel free to contact me with any additional questions you might have.

Happy house hunting.

Rebecca’s Email

The long term outlook for rates in the Denver Real Estate market, is so unstable it is tough to predict what we may be in for.  The US Dollar has strengthened lately, oil prices are coming down (which is good, but stability is more important)  I’m still worried that the price is too easily manipulated, and that it can go up, just as easy as it did for the previous few months.

Now for the mortgage market.  There is volatility, and that makes for uneasy buyer’s.  Rates have been swinging up and down lately.  So if you are in the process of getting a loan, make sure you find a comfortable point, and LOCK IN!

The good news is, RATES ARE STILL VERY GOOD!

The Federal Reserve held the line on Tuesday–leaving the Fed Funds Rate at 2.00% for the third straight meeting. The decision, however, was anything but cut-and-dry.

Earlier in the week, the Personal Consumption Expenditure data indicated that inflation climbed 0.8% overall in June, which is the highest inflation jump in 27 years. In addition, the report indicated that inflation now sits at 2.3%–above the Fed’s desired range of 1-2%.

Although the Fed ultimately left interest rates unchanged, inflation obviously remains a concern and the recent rise may lead to an interest rate hike by the Fed in the near future.

What Does This Mean to You? 
Many experts believe the housing market is nearing the bottom and may even be set to bounce back up. For now, home prices remain low, personal incomes are high, and interest rates are still very attractive.

If you have been weighing your options and waiting to see how things shake out, this is the ideal time to act–especially when we consider the new Housing and Economic Recovery Act benefits for home buyers:

Tax credits. First-time home buyers who purchase their primary residence between April 9, 2008 and July 1, 2009 are eligible for up to $7,500 in tax credit, as long as they haven’t owned a home in the last three years.

Down Payment Assistance…going, going, not gone yet. Another provision of the legislation eliminates some down payment assistance programs Oct 1, 2008…but they are still available right now. 

Bottom line…now is the ideal time to put together a home purchase strategy based on your unique situation.  Contact me if I can be of assistance.

The Housing and Economic Recovery Act of 2008, includes many positives for homebuyer’s.  None greater than the $7500 in Tax Credits for First Time Buyer’s.

Here’s the Lowdown.

• Any property, including condo’s and co-op’s, that will be used as a principal residence are eligible.
• Tax liability for the year of purchase is reduced by 10% of the cost of the purchase.  Not to exceed $7500.
• Full amount of credit is available to individuals with AGI of no more than $75,000 ($150,000 for joint returns.)  Credit phases out above the caps.
• Must be a FIRST TIME HOMEBUYER.  Meaning, you can not have owned a principle residence in the 3 previous years.
• Tax will be recaptured, at 6.67% per year, for 15 years.  If sold before 15 years,the remainder of credit will be recaptured on sale.  This basically means you need to pay back the credit over 15 years.
• The credit applies to any qualified purchase between April 9, 2008 until July 1, 2009.

There you have it.  A quick breakdown.  Please contact us for more information!

The housing bill that was signed this week included two major changes for FHA lending guidelines.  The changes are scheduled to kick in on October 1, 2008.

The first change is the minimum down payment requirement.  Currently FHA loans require 3% down.  On a $200,000 purchase this would be $6,000.  The housing bill will increase this minimum down to 3.5%.  On that same $200,000 home, the down payment will now be be $7,000.

The second major change is the elimination of seller funded downpayment assistance.  Currently the seller can contribute up to 6% to the buyer to cover their down payment and closing costs on an FHA loan.  These funds are deducted from the sellers equity and credited to the buyer at closing with a non-profit intermediary.  This has allowed buyers to take advantage of 100% financing.

One of the main reasons this is being eliminated is that FHA found the foreclosure rate to be about 80% higher on loans with down payment seller assistance verses FHA loans without.  There was also concern about inflated property values as a result of the seller funded DPA programs.

Moving forward the max the seller can contribute to the buyers closings costs and pre-paid items is 3% of the purchase price which has always been allowed.  The buyer will now be required to contribute the 3.5% for their the down payment.  Down payment assistance from a non-profit, employer, church or family member is still allowable and always has been.

Despite these changes, FHA loans will continue to be a good option for first time home buyers.