Today’s historically low rates increase your buying power! St. Louis Mortgage Interest Rate Update

By , on September 14th, 2011

Mortgage interest rates have reached historically low levels. It’s truly amazing how much the average borrower’s purchasing power has increased! The following chart tells it all. Check out the chart showing the history of interest rates as well as the examples of the savings below: Continue reading “Today’s historically low rates increase your buying power! St. Louis Mortgage Interest Rate Update“

Should you do a ‘cash-in’ refi?; St. Louis Mortgage Interest Rate Update

By , on August 4th, 2011

Over the past years, many of Americans pulled money out their homes through “cash-out” refis.  Today, many of my clients are bringing cash into their refinance transactions.  Money is flowing in the opposite direction.

You might consider bringing cash to close your refinance to:

1.  Lower your mortgage rate:  If your LTV is close to the 80% Loan to Value (LTV) threshold, then bringing money to the table to push your LTV below 80% can get the borrower a better rate. Continue reading “Should you do a ‘cash-in’ refi?; St. Louis Mortgage Interest Rate Update“

Undercover Investigation Finds Fraud Common Among Mortgage Loan Modification Companies

By , on April 7th, 2011

Dennis Norman St LouisYesterday, four fair housing organizations released their findings of a year-long undercover investigation of 80 loan modification companies, which reveal an industry rife with corrupt practices. The National Fair Housing Alliance, the Connecticut Fair Housing Center, Housing Opportunities Made Equal of Virginia, Inc., and the Miami Valley Fair Housing Center issued a report entitled, “Have I Got a Deal for You! An Undercover Investigation of Mortgage Loan Modification Scams,” which documents the tactics mortgage modification scammers use to take money from vulnerable homeowners. Continue reading “Undercover Investigation Finds Fraud Common Among Mortgage Loan Modification Companies“

Scorecard on Obama’s Housing Recovery Plans

By , on October 25th, 2010
Dennis Norman St Louis

Dennis Norman

The U.S. Department of the Treasury and the Department of Housing and Urban Development today released their “October 2010 Scorecard” on the “Obama Administration’s Efforts to Stabilize the Housing Market”.

The scorecard points out the success of “The President’s housing market recovery efforts” but does point out that “data in the scorecard also show that the recovery in the housing market continues to remain fragile.” Continue reading “Scorecard on Obama’s Housing Recovery Plans“

FHA Offers Alternative For Underwater Homeowners

By , on March 29th, 2010

Dennis Norman

Last week HUD announced changes to FHA home loan programs to provide refinancing options to homeowners who owe more than their home is worth. Under FHA’s new plan, existing underwater homeowners can refinance their existing non-FHA loan into a FHA loan as long as they are current on their loan and their current lender reduces their total mortgage debt by at least 10 percent of the loan amount.

The total mortgage amount for the borrower after refinancing cannot be greater than 115 percent of the current value of the home, bring the loan amount for an underwater borrower closer to the actual value of their home. I don’t believe this program is actually in effect yet, but it should be within the next few months.

Program highlights:

  • Existing loan must not be FHA-insured
  • Esiting lender must agree to writedown the principal loan balance a minimum of 10 percent and the final loan amount cannot exceed 115 percent of the current value of the home (including and second mortgages). The refinanced FHA loan cannot be greater than 97.75 percent of the value of the home.
  • The refinanced FHA loan will be on standard FHA terms
  • Existing lenders can retain second mortgages on the property, but only up to a combined 115 percent of the current value of the home.

Homeowner Eligibility:

  • Homeowners must be current on thier mortgage payments
  • Homeowner must occupy the home as their primary residence
  • Homeowners must qualify for new FHA loan under standard FHA borrower guidelines
  • Homeowners must have a FICO credit score of at least 500

I will write more about this program and give more details as they become available.

Record number of mortgage companies failed in 2009

By , on January 18th, 2010

Dennis Norman

MortgageDaily.Com tracks mortgage company failures on it’s website The Mortgage Graveyard.  According to The Mortgage Graveyard 225 mortgage-related firms in the U.S. ended operations or failed in 2009, higher than any year since they began tracking data in 1998. This was an increase of over 80% from 2008 which saw 124 firms fail.

The annual surge was fueled by a spike in bank failures — which increased more than 400 percent. Banks account for most of the country’s residential originations. Credit union failures, including corporate and state-regulated institutions, were up by more than a third.

Here in St. Louis it appears lenders have fared better and, according to MortgageDaily.com there was only one failure in 2009 and that was Gateway Bank.  According to a story published November 9, 2009 by Mortgage Daily.Com the Missouri Division of Finance reported it took possession of Gateway Bank after “several unsuccessful attempts by the bank’s ownership and management to sell or find new capital. The bank had been an aggressive lender and faced a $2,500 civil money penalty by the FDIC in June and another in May 2008.”

We are likely to see the disappearance of many mortgage companies, or their merger’s with bank partners, in 2010 as a result of tough new rules that took effect January 1st favoring bank-operated mortgage companies over independent mortgage brokers and mortgage bankers.

 

Over 360,000 borrowers have taken advantage of Fed’s Loan Modification Program

By , on October 9th, 2009
Dennis Norman
Dennis Norman

By: Dennis Norman

Earlier this week the Treasury Department released it’s eight “Tranche” report updating the status of the TARP (Troubled Asset Relief Program) which includes the Home Affordable Modification Programthat I have written about on several occasions. The report shows that progress is being made with regard to loan modifications with $27.07 billion, of the $50 billion available) committed to loan modifications through September 30, 2009 (see “HAMP” details on chart below). Continue reading “Over 360,000 borrowers have taken advantage of Fed’s Loan Modification Program“

Mortgage Programs Fall Short in Keeping Homeowners out of Foreclosure

By , on October 7th, 2009

To alleviate some suffering by homeowners, the Obama Administration introduced the “Making Homes Affordable” plan last March. Unfortunately, the plan has not yet had the intended effect.

Article by the Grand Law Firm

Economists debate whether or not the country is actually currently in a recession. Some say that there are positive signs that we have reached the bottom and the economy is turning around. Others, however, suggest that the country still has a long way to go and it may be years yet before we truly reach financial recovery. Regardless of who is right though, one thing is clear: many people are facing significant financial hardships and need help now. Continue reading “Mortgage Programs Fall Short in Keeping Homeowners out of Foreclosure“

Freddie Mac offers loan modification “room service” to help borrowers

By , on September 30th, 2009
Dennis Norman
Dennis Norman

By: Dennis Norman

In an effort to help delinquent borrowers obtain Loan Modifications under the Affordable Refinance Program of the Making Home Affordable Program Freddie Mac has hired a company to come to borrowers homes and help them put together the documents and complete other actions needed to begin their three-month trial payment periods under the Affordable Refinance Program.

The company hired by Freddie Mac, Titanium Solutions, will target late-paying borrowers with Freddie-Mac owned mortgages who have not responded to letters or phone calls from their lenders or those who have responded but need to provide additional information or documents to launch their three-month Home Affordable Modification trial period. Titanium will also help those borrowers who have started their trial periods complete the documentation process to enable them to be converted into final modifications. Continue reading “Freddie Mac offers loan modification “room service” to help borrowers“

Fed’s Loan Modification Program resulting in savings of $120 per month for borrowers

By , on September 16th, 2009
Dennis Norman
Dennis Norman

According to a study conducted by First American CoreLogicentitled “How the U.S. Consumer Has Benefited from Mortgage Finance Programs in 2009”, projections are there will be $2.3 billion in mortgages refinanced as a result of the Fed’s “Making Home Affordable” plan. According to the study, the median individual monthly savings was $120.

“firstamerican corelogic The quantitative easing policies of the Federal Reserve and refinance activity made possible by the Home Affordable Refinance Program (HARP) have allowed more than 2 million consumers to reduce their monthly mortgage debt obligations and put more money in their pockets,” said Mark Fleming PhD, and chief economist for First American Core Logic. “This permanent increase in monthly income is likely to, in part, be used to increase consumption and help to drive growth as the economy rebounds. Additionally, these refinanced loans are likely to be more sustainably affordable debt obligations. The combination of lower payments and fixed-rate terms should also reduce the risk of future foreclosure.”

Fed’s plan to modify loans to prevent foreclosure shows progress; but only for 12 percent of those eligible

By , on September 14th, 2009
Dennis Norman
Dennis Norman

Included in the “Making Home Affordable” program from the Obama administration is the “Home Affordable Modification Plan” (HAMP) designed to help 3 to 4 million home owners by modifying their existing loans to help them be more affordable.

Last week, Michael S. Barr, the Assistant Secretary for Financial Institutions, testified before a congressional sub-committee on the status of these programs. In his testimony Mr. Barr said that weakness in the US housing market developed over many years and that during this period “inadequate regulation of lending and securitization practices, including lax underwriting standards, helped cause widespread over-leveraging in the residential mortgage sector that has contributed to millions of borrowers having mortgage payments they are unable to afford.” Continue reading “Fed’s plan to modify loans to prevent foreclosure shows progress; but only for 12 percent of those eligible“

Appraisal, Loan Modification and Foreclosure Lawsuits Soar

By , on August 31st, 2009
Dennis Norman
Dennis Norman

A surge in litigation tied to real estate appraisals, loan modifications and foreclosures contributed to a 54 percent increase in mortgage-related lawsuits, according to the second quarter Mortgage Litigation Report from MortgageDaily.com.

During the second quarter, 125 cases were tracked, jumping from an already active 81 first quarter cases. The second quarter of 2008 had just 42 cases. Continue reading “Appraisal, Loan Modification and Foreclosure Lawsuits Soar“

One in twelve borrowers seriously delinquent on their mortgage

By , on August 22nd, 2009
Dennis Norman
Dennis Norman

By: Dennis Norman

All the news lately about the housing market, home sales in particular, has been encouraging and showing signs of stabilization in the real estate market and demonstrating that the real estate market may have seen the worst. Just when you think you may be through the storm though you see another dark cloud lurking in the distance. For the real estate market this dark cloud could very well be mortgage delinquencies and foreclosures.

 At the end of this week the Mortgage Bankers Association reported that serious mortgage delinquencies (homeowners that are 90 or more days past due on their house payments or are already in foreclosure proceedings) reached record levels in the 2nd quarter of 2009 and surpassing the record set in the prior quarter. According to the Mortgage Bankers Association statistics over 13 percent of all loans are now past due and 1 in 12 borrowers is seriously delinquent on their mortgage. This is a 45 percent increase from a year ago when 1 in 22 borrowers were seriously delinquent and a whopping 70 percent increase from two years ago when only it was 1 in 40. Continue reading “One in twelve borrowers seriously delinquent on their mortgage“

Refinancing borrowers choose fixed-rate loans over ARMS

By , on August 15th, 2009

Freddie MacFreddie Mac announced that in the second quarter of 2009, refinancing borrowers overwhelmingly chose fixed-rate loans, regardless of whether their original loan was an adjustable-rate mortgage (ARM) or fixed. In fact, ninety-nine percent of prime borrowers who originally had a conforming ARM selected a new conforming fixed-rate mortgage when they refinanced.

While 30-year fixed-rate mortgages still tend to be the preferred loan, more borrowers are choosing 15-year fixed-rate loans than before. “When interest rates hit very low levels for fixed-rate mortgages, borrowers often take tis opportunity to lower their interest rate and shorten their loan term,” said Frank Nothaft, vice president and chief economist for Freddie Mac. “In April mortgage rates reached new lows for both 15-year and 30-year fixed rate loans. Many borrowers could shorten their loan terms without having a big increase in their mortgage payments, thereby building equity faster, reducing the total interest paid over the life of the loan, and ensuring that their loan is largely paid off by their retirement.”

Fed Reserves publishes “5 Tips for Shopping for a Mortgage”

By , on August 1st, 2009
Dennis Norman

Dennis Norman

By: Dennis Norman

Buying a home should be a dream come true not a nightmare of worry and stress. A new Federal Reserve Board publication, “5 Tips for Shopping for a Mortgage,” will help consumers avoid potential pitfalls and make well-informed decisions when choosing a home loan.
Financing the purchase of a home is one of the most complex financial decisions that consumers make. The Federal Reserve’s latest “5 tips” guide is designed to help home buyers find the mortgage that is best for them. The complete guide is available here however a summary of the tips are below:
  • Know what you can afford.
    • Review your monthly income and spending to estimate what you can afford to pay for a home, including the mortgage, property taxes, insurance, and monthly maintenance and utilities.
  • Shop around-compare loans from lenders and brokers.
    • Shopping takes time and energy, but not shopping around can cost you thousands of dollars. You can get a mortgage loan from mortgage lenders or mortgage brokers.
  • Understand loan prices and fees.
    • Many consumers accept the first loan offered and don’t realize that they may be able to get a better loan.
  • Know the risks and benefits of loan options.
    • Mortgages have many features — some have fixed interest rates and some have adjustable rates; some have payment adjustments; on some you pay only the interest on the loan for a while and then you pad down the principal (the loan amount).
  • Get advice from trusted sources
    • A mortgage loan is one of the most complex, most expensive financial commitments you will ever assume–it’s okay to ask for help. Talk with a trusted housing counselor or a real estate attorney that you hire to review your documents before you sign them.

 

Mortgage information and advice from a St. Louis Mortgage Banker – Final post of the series

By , on July 31st, 2009
Dennis Norman

Dennis Norman

By: Dennis Norman

Today we pick up where we left off yesterday with my E-View TM with respected mortgage banker, H. John Frank, President of Paramount Mortgage Co. here in St. Louis.

If you missed part one, two, or three, there are links to both at the end of this post. And now, the final part of the E-View TM:

Q-This is a good time probably to address the Internet. There appear to be hundreds of lenders on the Internet for the consumer to choose from in addition to their local lenders.
Do you think there is cause for concern for a borrower in dealing with an Internet based company that does not have a physical location in their market? Or should they treat that type of company the same as a local company when checking them out to consider as their lender?

H. John Frank, Jr., President, Paramount Mortgage Co.

H. John Frank, Jr., President, Paramount Mortgage Co.

A-When you deal with a local lender or someone you have previously dealt with, you can always go into their office and discuss the problems or hopefully a local representative will be at the closing to go over the numbers with you and correct any mistakes or changes that have occurred. Continue reading “Mortgage information and advice from a St. Louis Mortgage Banker – Final post of the series“

Mortgage information and advice from a St. Louis Mortgage Banker – Part 3 of a series

By , on July 30th, 2009
Dennis Norman

Dennis Norman

By: Dennis Norman

Today we pick up where we left off yesterday with my E-View TM with respected mortgage banker, H. John Frank, President of Paramount Mortgage Co. here in St. Louis.

If you missed part one or two, there are links to both at the end of this post. And now, part three of the E-View TM:

Q-I have seen a lot of reports about “jumbo” loans and rates being artificially high on those loans. What is a “jumbo” loan and have the rates been affected in a negative way as a result of the mortgage mess?

H. John Frank, Jr., President, Paramount Mortgage Co.

H. John Frank, Jr., President, Paramount Mortgage Co.

A- Jumbo loans are ones that exceed the FNMA (Fannie Mae) loan limit. In most states, this limit is $417,000. There are fewer and fewer investors who make these loans because they are not as marketable (investors can always sell their ‘conforming’ loans to Fannie Mae or Freddie Mac if they need to raise funds). Without this constant outlet, the liquidity of these loans is diminished, thus demanding a higher yield for the product.

Continue reading “Mortgage information and advice from a St. Louis Mortgage Banker – Part 3 of a series“

Mortgage information and advice from a St. Louis Mortgage Banker – Part 2 of a series

By , on July 29th, 2009
H. John Frank, Jr., President, Paramount Mortgage Co.

H. John Frank, Jr., President, Paramount Mortgage Co.

By: Dennis Norman

Yesterday I did the first post of my E-View TM with respected mortgage banker, H. John Frank, President of Paramount Mortgage Co. located here in St. Louis.

Today we continue with part two of the E-View TM:

Q-How many states require mortgage brokers/bankers to be licensed? Does licensing protect the consumer in your opinion? If so, how? If not, why not?

A-I don’t know how many states require licenses, but later this year (I believe around the 1st of August) most, if not all, states will adopt a National Licensing Law which will require all companies and Loan Officers to be registered and licensed. Continuing education will be required as well as surety bonds, criminal background checks, fingerprints, etc. will be mandatory. I’m not sure if this protects the consumers, but it surely will cut out’ many of the brokers. The government will begin tracking Loan Officer’s, as well as appraisers, to make sure ‘bad’ loan officers can’t just jump from state to state making bad loans to innocent, uneducated homeowners. Continue reading “Mortgage information and advice from a St. Louis Mortgage Banker – Part 2 of a series“

Mortgage information and advice from a St. Louis Mortgage Banker – Part 1 of a series

By , on July 28th, 2009
Dennis Norman

Dennis Norman

By: Dennis Norman

It seems home mortgages are in the news daily lately: record-low interest rates, record-high foreclosure rates, the sub-prime mortgage mess, lack of jumbo loans and so on. It’s confusing at best and causing much concern for many people wishing to buy a home or refinance their existing home mortgage.

H. John Frank, Jr., President Paramount Mortgage Co.

H. John Frank, Jr., President Paramount Mortgage Co.

To find out just what is going on in the home mortgage world today I turned to someone I have known for over 20 years that is a highly respected St. Louis mortgage banker, H. John Frank. John agreed to do an E-View TM to discuss what is going on with mortgages today and to share information to help educate consumers that may be seeking a mortgage.

John was a great source of information and I have a lot to share so I plan to share his E-View TM in a series of posts over the next few days.

Here’s the beginning of my E-View TM with H. John Frank, the President of Paramount Mortgage Co. based in St. Louis, MO: Continue reading “Mortgage information and advice from a St. Louis Mortgage Banker – Part 1 of a series“

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