2012 Arriving Like a Lion!

Consumer Confidence and Mortgage Rates are on the way up!

I am excited for 2012!  I read in the Ogden Standard Examiner yesterday that in a recent GfK Poll (1000 adults with a margin of error of plus or minus of 4%) that 68% of Americans believe 2012 will be a better year than 2011!

In the past, when I begin to hear news of lower unemployment numbers and lower initial unemployment claims (9 weeks in a row!) and THEN I hear a report of strong consumer expectations, we are on the road to see increased real estate activity, SOON!  

If low rates and low home prices are what you would like to take advantage of, DO IT NOW!  With stronger economic reports, increasing real estate activity, and the European financial crisis out of the headlines, we WILL see HIGHER interest rates and HIGHER home prices in 2012!

Pending Home Sales Are Surging!

Pending home sale contracts (PHSC) are NOT closed transactions, BUT it is a good leading indicator of the positive momentum we are experiencing in the real estate market.

Buyer's are Buying!

In the West, PHSC's surged to 14.9% higher than a year ago at this same time (November numbers) and led the nation.  The fact that contract failure has been unusually high, may result in 1/2 or less of these contracts actually closing, but the higher numbers across the nation has been encouraging.  I have previously blogged about the need for a full application, credit report and automated underwriting approval to accompany every submitted offer to stop this increasing problem of contract failure. 

The last time PHSC numbers reached this level was in April, 2010 when first time home buyer's were rushing to meet the expiration of the tax credit available to them if they closed before April 30, 2010.  What a mad dash it was!

With home affordability at an all time high (lower home prices, higher income levels, and historically low interest rates), coupled with with pent up demand, it is no wonder the November, 2010 PHSC number was the best in 19 months!

Marty is always watching out for me! Closing 12/23/11

Marty, thanks for always watching out for me!  Just 8 months ago we closed on our purchase and as soon as the rates went down enough to make it worth our while, you called us!

Thank you!  Even though the process is complicated you always make it simple to understand.

Stacy Marble
Closing December 23, 2011

Has Housing Hit Bottom?

I watched the Today Show 3 weeks ago and Matt Lauer interviewed Barbara Corcoran (multi-gazillionaire investor in New York City) and was asking her if the housing market has hit bottom yet?

I thought this was an interesting question and kind of chuckled because of course I knew better; "Of course it hasn't!", I yelled at the television screen.   Or has it?

Then for the 3 weeks following this interview, positive economic news has come out: 1) more new  home buyer traffic in model homes reported by builders (highest volume in 3 years!); 2) 5 weeks in a row of declining initial unemployment claims; and 3) a possible resolution to the European economic  crisis announced today.

Because more economic indicators are pointing to the inevitable fact that we MAY have hit bottom (halleluja), I revisited the Matt and Barbara interview online and listened to her answers again.

Your credit monitoring program WORKED! It got us into our home-Closing 9/12/11

Marty, you began working with us 14 months ago and thank you for introducing us to your credit monitoring program!  It worked!   

You were persistent, you helped with our abundant questions, you were easy to contact and we loved how responsive you were to our texts and phone calls!  

We appreciate how friendly and nice you are!  Please thank your processing team for helping us with the Grant Program through Sunset City because that made all the difference in us getting in the home we wanted.   

Your processor, Kelsi, is awesome!  

Zach and Riley Foster, Closing 9/12/11

It doesn't take 20% down to buy a home!

Surprisingly, most buyer's I am talking to (8 out of 10 buyer's I speak with are first time home buyer's) think that it will take a MUCH LARGER down payment to buy a home than is actually required.  I regularly hear from prospective buyer's that they believe they need a down payment of 20%, or at least 10%, to buy a home.

Minimum down or ZERO down home loans are available!

Regular FHA loan financing: Through a short introduction of financing options which are currently available, I give prospective buyer's the good (GREAT!) news that FHA requires only a 3.5% down payment!  For FHA financing you don't have to be a first time home buyer! 

The minimum down payment money for FHA financing can come from several sources:

• With tax refund time around the corner, sizable refunds are common.
•  Parents or grandparents can gift the down payment and all that has to be done is to ask (or beg them) for a gift of down payment money.
• Maybe 401k money is tucked away and these funds can be accessed through a 401k loan.

FHA ZERO down loans: State Funded Programs allow for ZERO down payment if the first time home buyer has a better credit score than what is required for regular FHA loans.  ZERO down loans are only available to first time home buyer's (or to VA eligible buyer's).

FHA minimum down and FHA ZERO down programs are helping buyer's to buy homes that are "on sale" and finance the purchase at all time low interest rates!

HARP 2.0 is here!

As of December 1, 2011, HARP 2.0 will begin to help the underwater conventional loan homeowner who has not been able to refinance into a lower interest rate because they have little or no equity in their home (relative to their mortgage).

Click here for the HARP 2.0 tutorial on how to get started: HARP 2.0

Call me at 801-540-5108 to begin your HARP 2.0 mortgage application. 

HARP 2.0 preparatory steps to take

HARP 2.0 has waived ALL of the Loan to Value limitations and NO MATTER how upside down you are in your present loan, I can help you with a HARP 2.0 loan!

There are preparatory steps to take to be ready with your application on December 1, 2011 when the program is scheduled to roll out.

For the 5 preparatory steps, see my Blog tab "HARP 2.0" (on the home page of my blog under the picture of the Delicate Arch) or click here HARP 2.0 for the list of items needed to properly prepare for your loan application.  

Call me with questions at 801-540-5108 or e-mail: Harp2.0@martyqualls.net.

Get your FULL credit approval first!

An online "fast application", or a "pre-qualification" without a credit report pulled is causing problems!

Get a FULL credit approval letter before shopping!

At the recent National Association of Realtors (NAR) Convention in California, it was reported that TWICE as many purchase contracts are failing this year as compared to last year!

Realtors are taking phoney credit approvals from mortgage lenders who aren't doing their due diligence with their borrowers and then later the same lenders are finding that, OOPS, the borrowers credit, income, assets, or whatever caused the train to come off the track after the COMPLETE application information DIDN'T check out.  :(

My credit approvals are always backed up by a credit report AND an Automated Underwriting System (AUS) approval.  When my credit approval accompanies a purchase contract, all that needs to happen is the offer needs to get accepted, appraisal and title report received and close the loan!

Don't take a chance on a failed purchase offer because of the failure of the lender to do a FULL credit approval for the borrower.  :)

The VA loan is the BEST loan out there! And it should be! Thank you Veteran's!

I want to thank my Dad, Mel Qualls, for his Military service!

Is the American taxpayer footing the bill for HARP 2.0?

As I read an article written in the Financial Times this morning it became clear to me that the Home Affordable Program enhancement that is to be released 12/1/11 has some far reaching American tax payer ramifications. 

Underwater mortgage refinancing: Who's bailing out who? 

Because mortgage loans greater than 125% loan to value cannot be included in regular Collateralized Mortgage Obligations (CMO's), the mortgages created in HARP 2.0 (this program targets homeowners who are REALLY upside down in their mortgages) are ultimately, created, insured and owned by Fannie and Freddie and can't be sold in a "regular" bond issue.  These loans will need to stay on Freddie and Fannie's balance sheets for now. 

So what's the rub and why can't they stay with Fannie and Freddie?    

VA loans up to $417,000

I continue to be amazed that if a Veteran would like to purchase a home, VA will allow up to a $322,700 (inclusive of the VA funding fee) loan amount with a ZERO down payment!   Higher loan amounts up to $417,000 are also available with a down payment.   

VA financing for eligible Veterans and National Guard

The VA purchase program can't be beat for maximizing your return on dollars that don't need to be paid at closing for a down payment.  Additionally, there is no mortgage insurance to be paid monthly, which, for a ZERO down loan is an unbelievable benefit!   

Cash out refinancing with a VA loan can consolidate bills or get money to remodel your home and the loan to value goes up to 90%, which is 10% higher in loan to value than Conventional financing and 5% higher in loan to value than FHA (and FHA requires monthly mortgage insurance, VA does NOT!).

Eligible Veterans and National Guard have a great loan to take advantage of with the VA loan!

5 steps to avoid buying a money pit

I read a great blog post today and wanted to share some ideas to help buyer's avoid buying a home that is going to cost them a lot of money later.

I have always encouraged home buyers to hire a professional inspector who goes through the home carefully and professionally BEFORE ordering the appraisal or at least before closing.  

With a professional inspector by your side you can discuss the finer details of the report they have prepared, and you can benefit from their experience and ask questions about the following items.

Hire a professional to inspect your home before you close your home purchase!

How to avoid buying a money pit:

1. Attend inspections-when possible always walk through the home with the inspector, the additional insight, comments and "watch for this in the future" points they will bring out during the inspection walk through are priceless.  THIS is my #1 best to do suggestion of the 5 points!
2. READ the report and the seller disclosures carefully- when in doubt, ask questions!
3. Get multiple repair bids-2-3 is really the minimum and caution and research here will save many repair cost surprises later.  At this point, you have already paid the inspector for their knowledge, ask them questions about what the probable cost of a repair item might be.  When out of the inspectors area of expertise, hire a licensed professional for more information (roofer, HVAC, electrician, plumber, structural engineer).
4. Stop overconfidence in its tracks!  Even the easiest repair jobs will cost more and take more time than you think.  I can remember clearly the time I replaced my toilet wax seal when I tiled my bathroom.  It ALL takes longer than you think!
5. Prioritize price reductions and credits OVER seller repairs-to be in control of WHO does the repair and WHEN the repair is done, take a price reduction or a seller paid closing cost credit INSTEAD of having the seller do the repair before closing.  

You did good Orrin Hatch! Freddie and Fannie did a bad one!

Full article "$13M in Fannie and Freddie bonuses is an out rage!"

I am so happy that Orrin Hatch is my Senator!  The full article is linked here if you would like to read it. I have been following this as I became aware of, and angered by, the news that Fannie and Freddie executives received bonuses from US taxpayers who are keeping the two agencies afloat. 

Hatch, along with 58 other Senators, are demanding tighter oversight of funds paid to these two entities.  Way to go Orrin and other concerned Senators!  We DO need to send a message to our fiscal leaders and demand that these things don't happen again! 

What are Treasury Securities?

With $72B worth of Treasuries to be auctioned off during this Holiday shortened week, I thought it would be a good time to review what Treasury Securities are.  Each type of securities and their auctions effect Bond prices and Bond yields.

Remember, the higher the bond price when they are sold at auction is usually good for Mortgage rates as Bond prices and yields move in opposite directions.  The higher the bond price and the success of the auction will usually result in better mortgage rates.  :)

Here's a quick overview of Treasury securities:

• Treasury Bills, or T-Bills, are sold in terms ranging from a few days to 52 weeks. Bills are typically sold at a discount from the par amount (also called face value). For instance, you may pay $990 for a $1,000 bill. When the Bill matures, you would be paid $1,000.
• Treasury Bonds pay a fixed rate of interest every six months until they mature. They are issued in terms of 30 years.
• Treasury Notes, sometimes called T-Notes, earn a fixed rate of interest every six months until maturity. Notes are issued in terms of 2,3,5, 7 and 10 years.

Leno's "Video Metaphor" for the Federal Mortgage Relief Plan

It's complicated.  Call me for details.  If your mortgage loan balance is higher than the value of your home, I can help with details on November 15th of the HARP 2.0 program coming out December 1, 2011. 

Leno's "video metaphor"

Newly built home sales see gradual improvment

Sales of newly built, single-family homes rose 5.7 percent to a seasonally adjusted annual rate of 313,000 units in September, according to newly released data from the U.S. Commerce Department. This marks the fastest pace of new-home sales in the past five months.

"Today's report highlights the gradual improvement in housing market conditions that is becoming evident in certain pockets of the country, as consumers who can surmount very restrictive lending standards to qualify for a favorable mortgage rate seize on this opportunity to buy," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev.

"The latest numbers also reveal that first-time buyers are driving the new-homes market right now, as evidenced by the volume of lower-priced, entry-level homes under contract. It's worth noting that these consumers are very dependent upon federal policies and programs that support homeownership, such as the mortgage interest deduction and low-downpayment mortgage options that have been threatened by recent government proposals."

Property Inspection Top 5 for Buyer's

When purchasing a home, the buyer should be aware of and make special note of these top 5 items as they go through a home inspection with their hired professional company or if they do the inspection themselves.

These are tough things to catch, I see them either missed or overlooked when a buyer does the inspection themselves, and are EXPENSIVE to fix.  Catch the problems BEFORE you become the new owner (I always recommend hiring a professional inspector) and the expense and responsibility to repair the items becomes the sellers-NOT YOURS!

1. Foundation-walls in basement shows past water leaking, water seal paint has been applied but is flaking off, foundation is heaving out into the room, check for window well leaks.
2. Roof-curled shingles, leaks in the attic, check for shingle flexibility by putting a ladder up onto to the roof and actually bending the shingles.  If there is or has been a swamp cooler, check around the swamp cooler area very carefully outside on the roof and in the attic for past leaking.
3. Electrical-needs to be at least 100 Amp system, be wary of screw in fuse systems which can be checked off and acceptable in an inspection, but may still want a licensed electrician to inspect.
4. Plumbing problems-check for leaks under the sinks, around toilets, around washing machine
5. Heating and A/C-these need to be matched to the house size.  Once the furnace and air conditioning unit brand is found, Google the manufacturer and it will tell you the size of home the unit was designed for

Housing sales stronger in September, 2011

Click Here for My Featured Chart

Stronger housing sales, increased employment numbers, positive news out of Europe; all of these things could lead to higher interest rates. I can review your refinance or purchase options with "One Quall, that's all!" before these historically low rates vanish. :)

What does a Bond Chart tell you?

The beautiful thing about a Bond Chart is that it tells you where Bond prices have been and where Mortgage rates have been.  Can they tell the future?  Sometimes.  Here's how.

I study the bond charts all day long and I understand there are economic data or world news that negatively or positively influences the prices of bonds.  If bond prices go up, rates go down.  And vice versa, if bonds go down, rates go up.

So back to "how can the bond charts tell the future"?  The answer is simply this: History repeats itself.  You either love or hate history and it's the same with watching bond charts.  You either love it or you hate it and I love bond charts!

Because I watch Bonds all day long, I get familiar with floors of support and ceilings of resistance and can advise with a learned level of confidence a direction a client might consider and whether they should float or lock their interest rate.

Divorce and splitting equity in a home with a mortgage loan

Many times divorce requires one or the other of the ex-spouses to refinance the home mortgage.  The refinance accomplishes two things: 1) removes the other ex-spouse from the mortgage and the warranty deed and, 2) creates funds to pay out a portion of the home's equity to the ex-spouse signing off their interest in the home.

There are MANY options for refinancing to accomplish divorce decree requirements and finding the right one for the individual situation requires a broad product mix to be available.

My lending experience has uncovered the complex rules regarding the length of child support receipts, the amount of child support which can be counted when looking at the divorce decree and age of the children, and how much of the income can be be counted as a percentage of the total household income. 

I also rely on my trusted CPA Professionals to advise my clients on tax issues and questions when they arise.  A few examples of tax implication questions I have come across in the past: 1) divorce and property division, 2) 1031 exchanges and what benefit would be served by considering it, 3) equity division through home refinancing and future purchase of another property, and 4) future rental home purchase with equity coming from a divorce settlement.

I enjoy helping with divorce and equity division loans and will share my knowledge and expertise to make sure all parties are happy with the results. 

Top 3 Mortgage Application Hot Spots

As I thought through the past 6 months of loan applications I realized how important it has been to remind my mortgage loan clients of 3 things.  These 3 things speed up the processing of their loan application, prevent delays in processing, and document their file with critical information in advance of when it is needed (at final underwriting, which is just before closing, and can hold up closing).  These 3 items of special importance are worthy of their own Blog Post!

The importance of borrowers NOT applying for credit (going to RC Willey's to shop for furniture and applying for credit), or allowing a creditor to access a credit report (a harmless test drive at the car dealership?) cannot be overemphasized!  With new credit inquiries the file may need to go back to underwriting, after a new credit score is calculated, and what if the credit score drops?  The mortgage rate may now be higher or what if the score is on the cusp of approval, drops 3 points and now is DENIED?  Don't shop for credit, don't allow credit pulls.  Don't!

Don't change employment!  This one is self explanatory.  Even with warnings, I have had borrowers do it.  What if the new job has a mandatory probationary period?  Don't change jobs!

The last item is a "heads up", we need this as soon as it happens.   As soon as the Earnest Money Check clears the checking, savings, money market, stock account; PROVIDE proof that the check has cleared the account (front and back of the check, withdrawal of the cashiers check with a copy of the check face, bank statement showing check has cleared the account).  This allows a CREDIT of the earnest money to be given at closing.  IMPORTANT!

IRA withdrawal for down payment for first time home purchase

If you have been saving money in your tax deferred IRA and now want to buy your first home, how can you get your hands on the money locked up in your IRA without a penalty?  WITHDRAW IT!  Here is an excellent article to explain the details..and call me if you would like to review your mortgage options. 

Why Buyer's Should Get Off The Fence

In this article, why should I start with interest rates as to why potential buyer's should get off the fence?  Strong economic factors are weighing in on interest rates daily and when the recovery gets feet underneath it, rates will move up quickly and not look back to the levels we have today.  Rates today are the best we have seen since December 13, 2010 and we have had 8 consecutive weeks of dropping mortgage rates.

Housing prices are officially in double dip territory and prices are allowing buyer's to see dreams come true with homes prices and low interest rates giving them a payment that fits into their budgets.  Considering the home mortgage interest tax deductibility safe for now in our tax code, the advantage of interest and private mortgage interest tax breaks figures favorably into future homeowners benefit balance sheet.

And add mortgage financing into the mix of reasons and this may be the biggest factor of all to consider buying a home now.  FHA has recently been talking about increasing the down payment from 3.50% to 5% and conventional lenders are consistently sending a message of higher return (higher interest rates) for higher risk borrowers (lower credit scores and higher debt to incomes).

A strengthening economy inevitably pushing rates higher, the highest affordability index since 1963 (home price, household income and low interest rate measure), and looking at potentially a more difficult loan qualification situation in the future are the 3 reasons I believe buyer's should get off the fence.  Read more here about why buyer's whould get off the fence. When you have mortgage questions, call me for a personal consultation regarding your financing options.

How are the summers of 2003 and 2011 the same?

According to a S&P/CaseShiller Home Price Index report just released, home values in the United States in April 2011 have returned to an average level of value which was last seen in the summer of 2003.

Excellent purchase opportunities continue for first time home buyer's and for investor property purchasers.  With the home affordability index at the best level seen since 1963, call me if you would like to review your purchase options. 

Why loans are now FULL Documentation with NO exceptions

"I have NEVER been under the microscope in ANY of my other mortgage loan applications like I have been this time!", said my "perfect" (they really were a perfect borrower) investment property borrowers after visiting with them about some underwriting conditions in my office the other day. 

Many things have changed in the mortgage lending world over the past 3 years; some occurred subtly and other suddenly.

Why are ALL loans now so accurately and completely documented?  This is the subject of my Blog post today.

Counseling IS an effective tool to PREVENT Forclosure!

The probability of staying in your home (if you are in financial difficulty) can be increased dramatically (in certain cases, up to 200% improvement in your chances) if you receive financial counseling! 

The latest report from the Homeownership Preservation Foundation (HPF) makes a compelling argument for continuing support of Home Owner Counseling opportunities be made available to struggling homeowners.

During my loan application process I have a form that which says (and this is how I explain it, in layman's terms): "The mortgage company doesn't want your home back.  If you get in trouble, they will offer counseling and will help you stay in your home."

Until I read this article, I wondered if the mortgage servicing companies really had success with their customers who went through counseling.  Here is the article which tells me that we are successful in helping homeowners stay in their homes: Counseling is an effective tool to prevent foreclosure

Happy 4th of July!

On July 4th we celebrate our country's birthday, the freedoms we enjoy, and the American way of life! We hope you have a happy Independence Day. Thank you for choosing us for all of your mortgage needs.  Marty

VA Loans are Excellent for Active duty, Retired and Reservists

VA doesn't guarantee you will qualify (#1 wrong assumption I have heard over the years from Veterans I have helped), but the VA loan is awesome!  ZERO down and NO monthly private mortgage insurance!

Benefits and Q & A about why VA loans are awesome! I am ready to help with your VA questions.  Contact me at 801-540-5108. 

The American Dream and Government Intervention

A poll taken a week ago by The New York Times and CBS News indicates that 9 out of 10 respondents think buying a home is a good investment and worth the up and down value ride they experience.  45% say the Government should do more to help the Mortgage market problems and 53% want Government to give direct financial benefits to borrowers in financial trouble.  Almost none of the respondents want the tax deduction for mortgage interest to go away (this has been included in several Government budget balancing scenarios).  Read the entire American Dream article here. 

Be Smart About YOUR Closing Date and get a better interest rate!

When you are negotiating a closing date and you can get to a closing date that is WITHIN 30 days, DO IT!  This is the surest way to make sure that your rate is the best rate you will be able to get. 

If the closing is within 45 days and you WANT to lock your interest rate, the rate will be approximately .125% higher (about $15/month higher in payment than a 30 day lock).

Here is a great article about why it pays to be smart about your closing date.

Epic Refinance Opportunity is HERE, TODAY!

There's a Refi Boom Starting. Don't Watch It Pass.

Mortgage rates look like they'll fall some more, but don't sit by and wait for something better.
History has shown that mortgage rates can -- and do! -- change quickly. And because rates are unnaturally low to begin with, once they start to worsen, they should worsen in a hurry.
Exploit today's market while you still can.  Call me at 801-540-5108 and I can go over no
cost refinance options with you.

What's keeping a lid on home prices?

Anticipating and predicting a change of direction in home prices is difficult at best.  Many factors play into our market and are keeping a lid on home prices today.  

Because home prices are now at levels not seen since 2003, home buyer's have anxiety (read the article here) and additionally I am seeing softer prices because there is a lack of acceptable inventory with fewer buyer's making their way into the market.

With a smaller inventory in relation to buyer's entering the market, how does the general home buying population find a home that meets their needs in this market?  In this article I want to talk about the FHA 203k loan as a possible catalyst to provide a larger inventory of acceptable homes to buyer's. 


Since the first of the year, I am beginning to hear more requests for information on the FHA 203k loan than at any other time in my mortgage career which began in 1991 and I think it is because it allows buyer's to purchase the "wrong home in the right neighborhood" (read more about the FHA203k loan here) which could help more buyer's find the right home for them.  The 203k loan will help stabilize home values quicker than any other options available to the Government today.  Additionally, more that 100 million homes in the US were built before 1990 and almost every one of these homes would benefit from some amount of renovation and modernization.   

While we wait for a different inventory and more plentiful inventory to appear in the Real Estate Market, maybe the 203k loan is worth looking into.  Call me if I can help.

Here comes the refi boom of 2011

We're on the brink of something big. A wave of uncertainty about Greece and its debt, plus weaker-than-expected economic data at home, has dropped conforming 30-year fixed rate mortgage rates to levels not seen since December 2, 2010.
Here comes the refi boom of 2011!

It's been 8 straight weeks that mortgage rates have dropped. 8 weeks. Not even last year's historic Refi Boom produced a winning streak of 8 weeks. This year's streak is historic. Call me at 801-540-5108 to review your no cost, low cost or full cost refinance options. 

9 week Mortgage Rate Forecast

Forecast
Interest rates have moved downward this late spring on increasingly poor economic news and inflationary leveling, so much so that the idea of a QE3 (Quantitative Easing 3) has gotten some play. We never say "never", but we're comfortable in saying that it's not going to happen during this forecast period. The downshift in growth probably has a number of facets, including but not limited to interruptions caused to the Japan disaster and our near-historic Mississippi river floods. The next few weeks will probably bring more of an accumulation of poor economic data, but the four or five weeks after that may bring new glimmers of economic life. As such, we should start low and probably end somewhat higher in terms of rates.

For the next nine-week period, we think that the overall average for 30-year fixed-rate mortgages will run in a channel from 4.70% to about 5.10%. For Hybrid 5/1 ARMs, low funding costs and some increased appetite by portfolio lenders will probably serve to move those rates between 3.30% and 3.75%, and for conforming 30-year fixed rates, we see a range of 4.50% to 4.90%