Archive for December, 2013

December 30, 2013
MORTGAGE TIME
Mortgage Market News for the week of Dec. 27, 2013
Compliments of:

 

Patrick Gardner
Mortgage Loan Officer
NMLS ID: 378888
415-423-1424
Email me
Visit my website

 

 

QUIET HOLIDAY WEEK
The mortgage market was quiet during Christmas week. The few economic reports released this week, including Durable Orders, Jobless Claims, and New Home Sales, were mostly stronger than expected. As a result, mortgage rates ended the week a little higher.

While the headline results for this week’s New Home Sales report revealed a decline from the prior month, this obscured the substantial improvement. New Home Sales dipped slightly in November, but this was from a level in October which was revised substantially higher. In fact, the revised October reading was the highest level since July 2008. November New Home Sales were 17% higher than one year ago. This was another in a string of recent housing market reports which provide reasons to be optimistic heading into 2014.

On December 18, the Fed announced that it will begin to scale back its bond purchases. The added demand from the Fed for mortgage-backed securities (MBS) has been a major factor helping to keep mortgage rates low, so a reduction in bond purchases is clearly negative for mortgage rates. Considering this, it is interesting to see that mortgage rates have moved only a little higher since the Fed announcement. In other words, the taper was almost completely priced in to mortgage rates ahead of the actual announcement. By contrast, the reaction in the stock market to the Fed statement was much larger. Investors were pleased that the Fed intends to hold the fed funds rate low until much greater labor market improvement is seen, and the Dow stock index has climbed roughly 600 points to a record high.

ALSO NOTABLE
The IMF raised its outlook for the US economy next year
Core PCE inflation was just 1.1% higher than one year ago
10-yr Treasury yields crossed above the 3.0% level
The Dow stock index rose to a record high

 

WEEK AHEAD
The important monthly Employment report will not be released until January 10, leaving a light week for economic data to begin the new year. Pending Home Sales will be released on Monday. Chicago PMI Manufacturing and Consumer Confidence will come out on Tuesday. ISM Manufacturing and Construction Spending will be released on Thursday. Mortgage markets will close early on Tuesday and will be closed on Wednesday in Observance of the New Years holiday.

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House Calls…

December 26, 2013
HOUSE CALLS
Special Edition
KEEP YOUR CLIENTS WELL INFORMED AND WELL PROTECTED

As you know, important changes to the mortgage lending process will go into effect this January as result of the Dodd-Frank Act. As a reminder, the Dodd-Frank Act directed the Consumer Financial Protection Bureau (CFPB) to implement new rules in an effort to protect and inform consumers. Some aspects of the rules are complicated and certain niche products, like interest-only loans, may become less widely available. Even so, EverBank believes access to credit for qualified borrowers will not change dramatically.

Many of the practices outlined in these rules are already part of our current processes and guidelines. We’ve always focused on sound lending practices, which are at the core of the Ability to Repay (ATR) – Qualified Mortgage (QM) directive. In defining our approach to ATR/QM, we have sought a reasonable balance that will allow us to continue to provide a wide range of financing alternatives to our qualified clients.

Highlights of how the new rules will impact EverBank’s product offering are as follows:

  • The EverBank Preferred Portfolio JumboSM ARM programs will continue substantially as they are today. We will continue to offer an interest-only option, and DTI ratios above 43% will be allowed for qualified borrowers. We will also continue to offer an asset dissipation option for our clients consistent with our existing policy.
  • While EverBank will be offering non-QM options within our Preferred ARM programs, we expect secondary market liquidity for non-QM loans to be very limited. As a result, DTI’s above 43% and asset dissipation will no longer be allowed on our Preferred Fixed Rate products.

The following is a summary of the new CFPB rules:

FNMA and FHLMC have indicated they will only buy QM loans, given this there may be limited secondary market options for non QM loans. QM loans are defined as:
Total debt-to-income ratio less than 43% in most situations
Underwriting requirements documented and verified
Not allowed: interest only period in most situations, negative amortization, balloon payment, term longer than 30 years

 

Appraisal disclosure and delivery:
Lender must tell consumer within three business days of receiving the application that they will receive a free copy of the appraisal
Appraisal must be delivered promptly after it’s completed, or three days before the loan closes—whichever is earlier

 

Appraisal rules for higher priced loans:
Performed by a certified or licensed appraiser, inside of home must be reviewed
Lender must receive a written appraisal, provides a free copy to borrower at least three days before closing

 

Homeownership counseling:
Lenders must give the applicant a list of approved homeownership counseling agencies within three business days of receiving an application

 

HOEPA – High cost loans:
High cost testing now applies to purchase transactions, not just to refinance applications
The APR and Points & Fee threshold tests have been changed

EverBank will implement these changes, not just because we have to, but also because it is good for our clients. We live by the rule of putting our clients first. As such, we do not anticipate the new rules to significantly impact how we extend credit. Tom Wind, our Executive Vice President of EverBank Home Lending, offers his perspective below.

“In the years since the financial crisis, many changes have been made to the mortgage process. As a result, I think there have been some misconceptions that mortgage credit isn’t widely available, even to highly qualified borrowers. That’s not the case today. Documenting the ability to repay, which has always been a cornerstone to quality mortgage lending, is not expected to change that.”

 

Contact me to learn more
Call 415-423-1424

 

GET IN TOUCH

 

Patrick Gardner
Mortgage Loan Officer
NMLS ID: 378888
415-423-1424
Email me
Visit my website

 

 

Trulia’s Housing Predictions: How 2014 Will be Different

December 16, 2013

Trulia’s Housing Predictions: How 2014 Will be Different

WHAT TIME IS IT?! that’s right….MORTGAGE TIME

December 13, 2013
MORTGAGE TIME
Mortgage Market News for the week of Dec. 13, 2013
Compliments of:
Patrick Gardner
Mortgage Loan Officer
NMLS ID: 378888
415-423-1424
Email me
Visit my website

FED MAY TAPER SOON
Stronger than expected economic data and progress on a budget deal in Congress caused investors to move forward their expected timing for the Fed to begin to scale back its bond purchases. This hurt both stocks and bonds, and mortgage rates ended the week a little higher.

Fed officials have revealed several conditions which will help them determine when to reduce their bond purchases. Recent economic events and comments from Fed officials suggest that those conditions may have been met. The performance of the economy may be sufficient to make Fed officials comfortable reducing the level of monetary stimulus. A broad range of recent economic reports revealed gains in the labor market, GDP growth, Retail Sales, and manufacturing. In addition, Congress moved closer this week to reaching a two-year budget deal. The proposed deal would reduce the level of uncertainty about fiscal policy, which is another concern of Fed officials. As a result, investors expect the Fed to announce in the near future that it will begin to taper its bond purchases, and some think that it may take place as soon as next Wednesday’s Fed meeting.

Congressman Mel Watt was confirmed this week as Director of the FHFA. The FHFA is the conservator over Fannie Mae and Freddie Mac and as such has tremendous influence over much of the mortgage market. Director Watt takes over from Acting Director Edward DeMarco whose last act was to raise the fee Fannie Mae and Freddie Mac charge borrowers to guarantee loans. Unless reversed by Watt, the fee increase will be effective beginning early next year and will result in an increase in most mortgage rates of about 0.10%.

ALSO NOTABLE
Core PCE inflation was just 1.3% higher than one year ago
US household wealth increased to a record high during the third quarter
The Treasury will auction $96 billion in 2-yr, 5-yr, and 7-yr securities next week
Euro zone employment levels held steady during the third quarter

WEEK AHEAD
The next Fed meeting will take place on Wednesday. The statement is scheduled to be released at 2:00 et, and a press conference will take place at 2:30 et. Whatever indications Fed officials reveal about the timing of the taper likely will produce a significant reaction. The most closely watched economic data next week will be the inflation indicators and the housing market reports. The Consumer Price Index (CPI), an influential monthly inflation report, will come out on Tuesday. Housing Starts will be released on Wednesday, and Existing Home Sales will come out on Thursday. Industrial Production, Philly Fed, GDP revisions, Empire State, and Productivity will round out a busy week.

Should agent perfomance data be public?

December 10, 2013

Should agent perfomance data be public?

Join the debate!

Oakland vs San Francisco

December 10, 2013

Oakland vs San Francisco

10 major projects that are reshaping Oakland

December 6, 2013

http://www.bizjournals.com/sanfrancisco/blog/real-estate/2013/12/10-projects-reshaping-oakland.html?ana=twt

(Be sure to click on View Slideshow & click thru all 10 photos to read about each new project.)

Mortgage Market News for the week of Dec. 6, 2013

December 6, 2013
MORTGAGE TIME
Mortgage Market News for the week of Dec. 6, 2013
Compliments of:
Patrick Gardner
Mortgage Loan Officer
NMLS ID: 378888
415-423-1424
Email me
Visit my website

LABOR MARKET IMPROVING
A wide range of major economic data released this week revealed an unexpectedly strong level of improvement in the labor market and other areas. This is good news for the economy, but it is negative for mortgage rates. As a result, mortgage rates ended the week higher.

The data released earlier in the week hinted at healthy improvement in the labor market, and Friday’s Employment report confirmed the gains. Against a consensus forecast of 180K, the economy added 203K jobs in November. The Unemployment Rate declined from 7.3% to 7.0%, the lowest level since November 2008. The economy has added an average of 193K jobs over the past three months. Several Fed officials have suggested that they would like to see sustainable job gains around 200K per month to confirm that the labor market is back on more stable ground before scaling back on monetary stimulus. This data brings the Fed closer to tapering its bond purchase program.

This week’s economic data revealed that the strength in the labor market is consistent with improvement in the overall economy as well. Third quarter GDP was revised substantially higher to 3.6% from 2.8%, well above the consensus of 3.0%. This was the fastest pace of growth since the first quarter of 2012. The ISM national manufacturing index rose to the highest level since April 2011. October New Home Sales increased 25%, but this was from a somewhat depressed level in September. Finally, Consumer Sentiment jumped to the highest level since July.

ALSO NOTABLE
Core PCE inflation was just 1.1% higher than one year ago
Weekly Jobless Claims declined below the 300K level
The European Central Bank made no change in rates
Gold prices declined to the lowest level since July

WEEK AHEAD
The most significant economic data next week will be the Retail Sales data and the PPI inflation report. Retail Sales account for about 70% of economic activity and will be released on Thursday. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products and will come out on Friday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. The next Fed meeting will take place on December 18.

Your December House Calls is Here

December 4, 2013
HOUSE CALLS
December 2013
Compliments of
Patrick Gardner
Mortgage Loan Officer
NMLS ID: 378888
415-423-1424
Email me
Visit my website

BUYING TRENDS: AMERICANS PREFER MIXED-USE, WALKABLE COMMUNITIES
New research by the National Association of Realtors® has consistently revealed that Americans prefer walkable, mixed-use neighborhoods and shorter commutes. According to NAR’s 2013 Community Preference Survey, 60% of respondents favor a neighborhood with a mix of houses, stores and other businesses that are within walking distance, over neighborhoods that require more driving between home, work and recreation.

Also, while the size of the property does matter to consumers, they are willing to compromise size for a preferred neighborhood and less commuting. For example, although 52% of those surveyed prefer a single-family house with a large yard,
78% responded that the neighborhood is more important to them than the size of the house
57% would forego a home with a larger yard if it meant a shorter commute to work
55% of respondents were willing to forego a home with a larger yard if it meant they could live within walking distance of schools, stores and restaurants

“Growth patterns, economic development and quality-of-life issues are inextricably linked to the success of communities and residents,” said NAR President Gary Thomas. “Realtors® build communities and care about improving those communities through smart growth initiatives. Although there is no one-size-fits-all approach, smart growth is typically characterized by mixed-use development, higher densities, and pedestrian-friendly streets that accommodate a wide diversity of transportation modes.”

The most popular choice among respondents? A suburban neighborhood with a mix of houses, shops and businesses. Least popular was a suburban neighborhood with just houses.