A couple of weeks ago Fannie Mae (FNMA) announced yet another game changer to the mortgage and real estate industries.  The FNMA LQI (loan quality initiative) was introduced to the mortgage world.  Effective for loan applications originated on or after June 1, 2010 (my birthday) Fannie Mae will require a credit "refresh" within 72 hours of funding.  The purpose of this credit refresh is to determine any change in a borrower's debt load from time of application.  Credit reporting agencies have made a credit comparison report available.  The comparison report will be pulled within 72 hours of funding.  If an increase in a borrowers debt capacity and/or undisclosed debts from time of initial application have been identified then a refreshed report will be issued and the file will be sent back through underwriting.

An increase in a borrower's debt capacity may be a result of:

• A new debt
• Increase of minimum payment for revolving debt (credit cards, store cards, lines of credit)
• Student loans coming out of deferment

As you can imagine, this will inevitably cause delay in funding a loan when a borrower's debt capacity has been impacted.  If a borrower incurs new debt and does not disclose the outcome of loan approval may be changed.  Fannie Mae's primary goal is to insure a borrower's ability to sustain homeownership.  It's important to look at a borrowers total debt capacity at time of final loan application.

Responsibility: The Lender – Lenders are responsible for accurately qualifying borrowers and assessing their ability to repay their loan.  Sound underwriting are implemented to exercise due diligence throughout the entire origination process.  The responsibility of the loan file begins at time of application and carries through to closing.

Responsibility: The Borrower – Borrower's have the responsibility of providing the lender with accurate and complete information for the loan application.  It's always been important, but now is even more important for a borrower to notify the lender of any changes to their employment, income, debt obligations or other financial circumstances during the application process.

The bottom line: As you embark on your next financing transaction (purchase or refinance) make sure you fully disclose all debt at time of initial application.  Any new debts that may not be reporting at time of application will surely reveal themselves and may cause you an issue in obtaining loan approval.  Spending/borrowing on revolving accounts must be managed very carefully and/or completely avoided. Please remember that even a small change in one of these payments could potentially cause your debt capacity to increase and will result in a re-underwrite of your loan which will result in a delay of closing.

I am always here as a resource, in process or before you decide to make a move.  Please give me a call (503.585.1105) or shoot me an email to inquire about your specific refinance or purchase questions.

Timing is everything in the real estate market.  Mortgage rates are near a low in 2010 and NOW is a great time to inquire about a possible refinance.  The federal government's mortgage backed securities purchase program ended on March 31st, but since then we have seen private and foreign investors move into the US bond market as "safe haven" buying takes place.  With so much turmoil in the eurozone countries such as Greece and Germany are moving investments into a "safer" place (i.e. US bond market).  As the bond market benefits, you as a homeowner or potential homeowner can also benefit from the result of lower mortgage rates.

By now I'm sure you have heard rates have been low and may have even heard they have began to take a turn to rise.  Watching mortgage rates on a daily basis can be like riding the California Screamin' roller coaster at Disneyland.  The volatility makes it even more important for you to have a trusted and educated resource in the mortgage world.  Currently we are in the sub-5% range on a 30 year fixed conforming or FHA loan.  If you have a mortgage in the 5.5%-6% range, it may be worth your time to give me a call (503.585.1105) or shoot me an email to talk about a potential refinance opportunity.

If you did not take advantage of the extremely low rates in 2009 or did not have the ability to, now may be your chance.  The rates change daily (and sometimes 3-4 times a day), so please take the 4-5 minutes it takes to call me and go over your potential opportunity before we see the rates fade away.

We now have two days, yes, 2 days until the home buying tax credit is no longer available for first time buyers and move-up buyers.  It's been (and still is) a very fun opportunity to work with all those making a move to cash in on what seems to be one of very few tangible benefits (of the government stimulus package) for the American tax payer.  Accepted contracts dated by 4/30 qualify (with an eligible buyer).  Those still hanging around for final signature/dates after Friday will be out of luck.

Early this month we had A Lot of words flying around the real estate and mortgage industry indicating that the USDA Rural Housing funds would be dried up by the end of April.  On April 20th we received an update regarding the remaining funds.  Based on the memo there was still $1,546,902,245.82 available for purchase transactions.  This year's fiscal allocation started with $13.5 billion.  The 11.45% remaining funds allocated for purchases give us a little room to breathe this month.  Obviously those funds will dwindle rapidly as the tax credit contracts close escrow in the next two months, but it doesn't fully rule out the possibility of making an offer on a home in the next week or two with the intentions of using the USDA program.  However, please note that it will be very important to have a back up plan in the event that the well runs dry and we have no possibility of obtaining the USDA guarantee (your next best bet will be the FHA program).

I'm here as an advocate for you real estate financing.  As a loan officer at Landmark Mortgage I have the ability to position you into the right program at the right time with the right rate.  Please feel free to give me a call (503.585.1105) or shoot me an email with questions regarding your financing needs.

USDA has announced that the funds allocated for rural housing home loan program for the fiscal year of 2010 will likely be depleted prior to the end of April. The rural housing program budget is set in October each year. The increasing propularity of this program caused a double of funds from 2009 to 2010, but the picture is now clear that the increase was still insufficient.

Along with the announcement from USDA we received an email from nearly every lender stating they highly advise files be placed in line for underwriting to reserve the funds ASAP. In past years, the USDA program funds have neared depletion towards the end of the budget year allowing for USDA to give a "conditional funds approval". This year we will not have this flexibility since we are still so far from the budget allocation. Therefore, I strongly urge anybody looking to purchase with the USDA rural housing home loan to make an offer sooner than later.

If you are looking to purchase or you have clients looking for homes and planning to use the USDA program, please call me and confirm the update on funds availability prior to making an offer.

As a borrower it may be a bit more difficult to obtain FHA financing in 2010.  Today the FHA announced a series of changes to the FHA insured mortgage program aimed at increasing home ownership in underserved neighborhoods.  The program has become the most widely used program for first-time buyers or move up buyers with down payments less than 10%.

In the FHA official announcement today it spelled out a series of changes that will increase the capital fund of FHA as an effort hedge against the increase of defaulting mortgages.  Fortunately FHA retained the minimum down payment of 3.5%.  The changes will consist of the following:

• Increased mortgage insurance premium by .5% (from 1.75% to 2.25%).
• Seller concessions (credit towards closing costs) reduced from 6% to 3%.
• Increased enforcement on FHA lenders/banks.
• 580 FICO score now required to qualify for 3.5% down payment program (Scores below will require 10% down payment.  However, nearly all FHA lenders nationwide have a minimum 620 FICO score overlay).

The changes come as a necessary precaution for FHA to avoid asking the federal government for assistance to sustain it's mortgage insurance for homeowners.  FHA does not actually service the mortgages issued by FHA, but insures the loans serviced by the banks.

As a borrower, the increased mortgage insurance premium will have a small impact on your monthly payment and the limit of 3% seller concessions may require you to come to closing with a bit more cash to cover the exceeding amount of closing costs and prepaid items.

The increased enforcement on FHA lenders/banks will be determined by each banks servicing and performance of current FHA loans.  As a precaution to retain the ability to fund FHA loans we will see increased lender guideline overlays in the near future.  A guideline overlay is an individual lender/bank guideline that is usually more stringent than the standard loan guidelines.  As a result guidelines may vary significantly between banks.

We will likely see an increase in FHA loan denials in 2010.  A borrower's FHA loan may be denied simply because it was sent to the wrong FHA lender.  If you have questions about an FHA loan or want to know if you qualify feel free to give me a call or email me.  As a broker, Landmark Mortgage has several options for FHA lenders.  It will be important for borrowers to work with a knowledgeable broker who has experience and options for each FHA loan applicant.  As a loan officer I will find the right fit for your specific loan profile.

FHA will issue a Mortgagee Letter tomorrow announcing the exact dates of implementation.

Zillow just announced they have expanded their real estate web presence with the addition of rental properties.  As of yesterday, when I checked, the website had the "New! Rentals" tab listed on the "Homes" search tab at the top of the page.  If you search properties for Salem, Oregon there are currently 0 rental listings since the service is literally a day old.

I know that I've had a tremendous amount of success with listing rental properties for myself and friends (those needing help to post) with listings through the ever so wonderful Craigslist.org.  I'm sure I'll write about this again sometime in the near future as we begin to see some traffic on Zillow's rental tab.  The immediate downfall of Zillow is a cost.  Craigslist is loved mainly because it's free and people know to look there.  Currently potential renters don't know to look to Zillow unless they are also conducting some research on a possible purchase.  However, the cost to list a rental is not significant.  From what I've read it looks like it will run you $9.95 for a 180 listing.  That's not too bad.

Personally, I like Craigslist.  However, I mainly post there because I know people are looking.  Zillow is well known in the online real estate search category so I expect this new rental search to be pretty darn hot.  I can see property management companies and personal investors flocking to a single location where all properties can be viewed.  Craigslist will still be alive.  And depending on your location (i.e. the Bush Park neighborhood here in Salem) a sign in the yard may be all it takes for you, but if you need some additional help in getting your rental listing viewed, you might want to try www.zillow.com.

The Ducks pulled out a squeeker, mortgage rates are low, I heard my new baby's heart beat for the first time and we get to spend a couple of days with extended family this week! In my book this week couldn't get any better.

I am more than excited for the Civil War match up this year. The hype in the state of Oregon this week is incredible. I look forward to watching the game next week with anticipation and hope that the Ducks will be making a trip to Pasadena for New Years!

We're reaching the one year anniversary of the Treasury's announcement of their plan to begin purchasing Mortgage Backed Securities. On November 26th, 2008 we saw an overnight drop in rates that created a big surge in mortgage applications. Since the plan was initiated the $1.2 trillion (eek) in MBS purchases has sustained mortgage rates for FHA and conforming loans in the 4.5%-5.25% range. There was a bit of worry that the Treasury would pull back the program in early Fall, but now the picture has been painted that we'll see the remaining funds be phased out towards the end of the first quarter of 2010. The combination of the Home Buyer Tax Credit extension/expansion creates a great opportunity for those in position to purchase RIGHT NOW.

On a more personal level, my wife Kari and I had our first doctor appointment for her new pregnancy and we were able to hear the precious heart beat of our new little one.  Our boy/girl twins are now 21 months and are beginning to get the idea that there's a baby coming to the Venti house.  I am blessed to have an amazing little family and look forward to the adventure of having more kids than adults in our family!

During this Thanksgiving season, I wish to express my  appreciation to you for placing your confidence and trust in me.  I am blessed to be in a position to serve you, your friends and your family.

May your Thanksgiving be a joyful time of fellowship.  

“Give thanks to the Lord, for he is good; His love endures forever.” Psalm 107:1

We must have a passion for what we do in life.  This man encapsulates the meaning of a niche.  And he loves it.  Simply beautiful.