Happy Holidays to all my wonderful clients and Realtors (Market Update Below) December 16th, 2011 1:31 PM In case you have not heard, this week we once again hit a “record low” for mortgage rates. This morning I priced out a VA 30 Year fixed at 3.75% and this is with 0 (ZERO) POINTS!!!!! (APR 3.875%) And better yet: Texas Vet VA is at 3.23% for a 30 year fixed (APR 3.35%) I know you’ve heard this before but rates cannot get any lower. Homes values are down in this buyer’s market and interest rates are the lowest they have ever been. Happy Holidays, Samuel Morales Residential and Commercial Loan Officer Office: (210) 257-0642 Mobile: (210) 286-7267 Fax: (210) 257-0510 www.yourloanofficer4life.com www.streamlinefha.org www.streamlinefha.net www.texasjumbomortgage.org NMLS: 295626

What Does the Congressional Super Committee Failure Mean for Mortgage Rates and Real Estate?

              As expected the Congressional Super Committee did not meet its deadline.  What does this mean for mortgage rates in Texas and across the nation?  The Dow has already started down as of yesterday and is continuing the same trend as of today, so far as of 11:00am the DOW is down almost a hundred points.  Typically the 10-year bond drops shortly after the DOW goes down so we should see a dip in mortgage rates shortly.  Being that rates are already rock bottom there is not much room to go down to much further so expect a drop of no more than .25 of point.

                We are in some scary times right now but also exciting times as we are living in a historic moment.  How we handle this fragility in our situation will dictate policy that impacts all Americans for generations to come.

                Much of what we hear in the news about the housing market making a comeback is not correct.  Over the past 12 months I’ve seen stories claiming that many areas have seen housing sales increase and home prices have been inching up.  While this may be true the numbers are being doctored; let me explain.  Last year in the USA there were a total of about 5.5 million foreclosures.  So far this year Bank of America alone has over 5 million foreclosures, this figure does not account for Wells Fargo, Chase, Citibank or any other lending institution.  The banks are holding on to inventory and in some cases are renting homes back to the parties that have been foreclosed on.  Should the banks flood the market with this inventory what do you think will happen to the home prices across Texas and the rest of USA?  You guessed it; the housing market which is the biggest indicator of how an economy is doing would completely collapse and home prices would plummet.  Immediately, this situation is killing the refinance market because banks are going with the most conservative appraisal approach when approving refinances.  Just in the past 6 months I have lost several refinance deals due to appraisals coming in lower than market value.  However; we are not having the same issue with purchases as banks need to get rid of inventory.

                What’s the flip side?  I do see a possibility of recovery.  In a previous blog post I noted that during the mortgage and real estate boom we saw rental rates go down and mortgage rate along with home prices go up.  Which meant it was more expensive per month to purchase a home than it was to rent.  That trend has now reversed, we will be seeing home prices continue to drop and mortgage rates will stay very low (unless hyper-inflation occurs) for at least 2-5 years.  Rental rates are skyrocketing so now it is less expensive per month to purchase a home than it is to rent.  This reversal, in my opinion is what will get us out of our current situation and help in the reset of our economy.  Assuming our congress gets their act together the recovery mentioned above has a high probability; if not, hyper-inflation will happen and we may be screwed for a long time to come.  I don’t know about you but I’m crossing my fingers and hoping for best in this historic moment in time.

 Samuel Morales

Residential and Commercial Loan Officer

Office: (210) 257-0642

Mobile: (210) 286-7267

Fax: (210) 257-0510

www.yourloanofficer4life.com

www.streamlinefha.org

www.streamlinefha.net

www.texasjumbomortgage.org  

NMLS: 295626   

Recommended credit Repair Company: Sky Blue Credit Repair

The House Voted In Favor of Increaseing FHA Loan Limits

As of yesterday the House voted in favor of increasing FHA loan limits back up to their previous limits prior to Oct 1, 2011.  We should be hearing if congress is to OK the legislation in the coming days.  If I had to make an educated guess I would say the legislation will pass considering the amount of inventory the large banks are holding in regards to foreclosures; they need all the help they can get. 

Average Overnight Mortgage Rates Per BankRate.com

Product	Rate FHA	Rate Conventional
30 Yr Fixed	4.03%	4.4%
15 Yr Fixed	3.38%	3.75%

On average I am .02 - .25% lower than the overnight average.

Reminder of new FHA loan limits-Link attached to find your by county in Texas

I have been getting a few calls from clients and my Realtors that are not aware that the FHA loan limit for Bexar County and many counties in Texas have decreased as of October 1, 2012.  The FHA loan limit for Bexar County has moved from $332,500.00 down to $287,500.00.  To find out the new FHA Loan limit for you county you can go to http://www.yourloanofficer4life.com/FHAlimits

If you are trying to refinance your FHA mortgage and you have questions because your loan balance is above the new FHA limits please contact me and I go over your scenario with you.

As always please keep me in mind for your mortgage,

Samuel Morales
Residential and Commercial Loan Officer
Office: (210) 257-0642
Mobile: (210) 286-7267
Fax: (210) 257-0510
www.yourloanofficer4life.com
www.streamlinefha.org
www.streamlinefha.net
www.texasjumbomortgage.org
NMLS: 295626   

Recommended Credit Repair Company - Sky Blue Credit Repair

I know this is not the norm for my blog which I try to keep to a mortgage related topic but...

August 30th, 2011 10:40 AM

I have a trusted friend with years of experience in the service industry that is looking for investors for a business in Burnet, Texas. The establishment that is being taken over has been in existence for over a year and a half (and has been profitable). Details of the transaction, P&L, business plan and supporting documentation will be provided to qualified investors. Interested parties should contact Lewis Smith at biglou29@gmail.com
Once again, I normally keep my blog to lending related topics but I feel this is a strong transaction. I have worked with Lewis Smith in the past and I know he runs a tight ship.

USDA Announces Big Change to go Into Effect October 1st of This Year

Overview – as set in notice (AN 4551) announced that the Single Family Housing Guaranteed Loan Program will implement changes to the USDA Guarantee Fee.  The new annual fee (similar to FHA Annual MIP) will be charged and the current upfront fee will be decreased.

The changes are effective on October 1, 2011 for any loans receiving the USDA conditional commitment on or after this date.  The reduced up-front fee will be still be calculated based on the guaranteed loan amount.  The new annual fee will be paid over the life of the loan and is not removed at 78%.  It is calculated based on the unpaid principal balance and will be collected monthly but paid to the Agency on an annual basis.

This change is driven by the date USDA issues the conditional commitment, and that date is contingent upon:

·         Our ability to get the loan submitted to USDA for underwriting review

·         USDA’s queue and turn time in issuing commitments

There will be no exceptions for the change in fees that will occur if the loan does not receive the conditional commitment before 10/01/11.

                                Current Guarantee Fee                 New Guarantee Fee

Up-front Fee     Purchase 3.5%                                   Purchase 2%

                                Refinance 1%                                     Refinance 1%

Annual Fee         NA                                                          0.3%

Please feel free to call me with any questions, the information above is verbatim per the USDA Release

Samuel Morales

Residential and Commercial Loan Officer

Office: (210) 257-0642

Mobile: (210) 286-7267

Fax: (210) 257-0510

www.yourloanofficer4life.com

www.streamlinefha.org

www.streamlinefha.net

www.newhousingbill.org

NMLS: 295626   

Recommended credit Repair Company: Sky Blue Credit Repair

What to Consider When Shopping For a Loan Officer for Your Mortgage Transaction?

What to Consider When Shopping For a Loan Officer for Your Mortgage Transaction?

I have been in the Texas mortgage industry for over 9 years and I have seen the good, the bad and the ugly of Texas mortgage loan officers and Texas mortgage lending institutions.  I have to say, that while most Loan Officers pretty much offer the same products, not all lenders and not all loan officers are the same.  In this article I am hoping to give you an idea of what to look out for and what questions to ask when selecting both a lender and a Loan Officer for your mortgage transaction.

Questions to ask your Loan Officer:

1.       What are your current underwriting times?

·         If there is one thing I have learned from being in sales it’s that “Time Kills Deals”.  Anytime you have a transaction whether or not you think you are in a rush, you are in a rush.  Extended time frames are probably the biggest deal killers of any transaction not just mortgage transactions.  If a lender has high turn times think twice about sending your mortgage to them especially with a purchase transaction.  I have seen files take months to close because of underwriting turn times.  Most lenders will have turn times posted for Loan Officer on both the Broker and Banker side of the business to view.

2.       How long have you been in the mortgage business for?

·         It’s not always a bad thing to work with a new Loan Officer; however, on complex transactions it will definitely impact you directly.  In the current world of mortgage lending every loan is complicated, it is important that your loan officer knows the ins and outs of the business.  Some knowledge only comes with time in the trenches and when a loan starts to go south experience makes a huge difference.

·         If you can ask a friend or colleague who they used on their mortgage and if they were happy with their loan and the service provided.

3.       If you are doing an atypical mortgage such as a construction loan or FHA rehab make sure to ask your Loan Officer if they have experience with that type of transaction.

·         Construction lending is a whole other beast from a normal mortgage loan especially if it is an FHA 203K government rehab loan.  Many times construction loans can take longer to close than a normal mortgage.  This is important because you don’t want to get caught paying extension fees on a real estate contract which can be up to $150.00 per day.  An experienced Loan Officer will know to communicate with your Realtor and/or sellers agent so that the contract can be amended for a longer period of time before it’s too late.

4.       Last but not least, make sure your Loan Officer is in the same state as your transaction or at least familiar with state law of the subject property.

·         Many states have different state laws that will impact your transaction.  For example, the state of Texas has many laws designed to protect consumers when it comes to home equity loans.  These laws require unique disclosures that are not required in any other state.  There is nothing worse than getting to the closing table and only to find out that your loan can’t fund because a step was skipped or a disclosure was forgotten. 

I have seen many Mortgage transactions fall through because of a bad Loan Officer.  Above anything listed above find someone you trust and don’t trust a Loan Officer that tells you what you want to hear; trust a Loan Officer that tells you how things are, whether or not you like what he is saying. 

I will leave you with one last tip.  It is not a Loan Officers job to approve your mortgage, that duty goes to the mortgage underwriter.  It is the Loan Officer’s duty to structure your file in a manner that it is most likely to be approved.  Do not lie on your loan application be upfront with issues you think could impact your approval because the underwriter will find it regardless.  If the Loan Officer knows about the issue ahead of time he can package the issue so that it may not be as much of an issue as you think.

In a mortgage transaction you must TRUST YOUR LOAN OFFICER, SO FIND A LOAN OFFICER YOU CAN TRUST.