RJ Baxter's Mortgage Blog

CARD- Credit Card Reform

Fri, 03 Jul 2009 10:46:54 -0700

The new Credit Card Accountability, Responsibility, and Disclosure Act became law in May, triggering sweeping reform of the credit card industry. Among the changes that credit card companies will be subject to are the elimination of double-cycle billing, opt-in requirements for over-the-limit protection, increases in rate not allowed unless borrower is 60 days or more past due, and payments required to be applied to highest rate balance first. Although on the surface this ...

One More Chance

Wed, 17 Jun 2009 06:03:47 -0700

You may have read articles recently that mortgage rates have risen. Unfortunately, that is the case. Rates approached 6% on a 30 year fixed which is very high compared to what we have seen this year so far. Still historically low, these rates still put a damper on refinance activity, and many people who were waiting for rates at 4.5% or lower were left in the dust. If you have been following my blog, ...

Mortgage Documentation- Be Prepared

Fri, 05 Jun 2009 05:05:11 -0700

If you have applied for a mortgage in the past year, you know that documentation standards have gotten more and more stringent. Even the most credit-worthy borrowers with assets and equity in their home or high down payment are being scrutinized. Gone are the days of reduced documentation or "stated" income. All borrowers must now provide a myriad of paperwork in order to qualify for a mortgage. Here is a summary of some of the ...

Mortgage Rates Rise

Thu, 28 May 2009 12:11:09 -0700

Mortgage rates have risen over the past week over .5% to the highest levels we have seen for 6 months. The main factor at play that has caused this has been the oversupply of money that is being pumped into the system in the form of government bond auctions. The markets yesterday went into a selling frenzy as fear of impending inflation caused investors to flee from long term bonds, a negative for mortgage ...

ARMs Again a Viable Option

Tue, 19 May 2009 14:16:10 -0700

Once again, adjustable mortgages or ARMs are becoming a viable option for the right homeowner. For the same points and fees as a comparable fixed rate mortgage, a homeowner can obtain a rate that is over 1% lower than a 30 year fixed rate mortgage! That means on a $200,000 mortgage, the homeowner can save $120/ month or $7200 over 5 years! ARMs can come in many forms and if structured properly, are not ...

Home Affordable Loan Program

Fri, 08 May 2009 08:54:47 -0700

The Home Affordable Loan Program went into effect recently and is offering opportunities for many homeowners who have seen their home values decline. The program allows for homeowners to borrower up to 105% of the value of their home, and if their original mortgage did not have mortgage insurance, the new mortgage will also be free of mortgage insurance! If you have a second mortgage, your total loan-to-value ratio is unlimited! For more ...

Guest Authors Wanted

Thu, 07 May 2009 08:29:06 -0700

I am currently seeking guest authors who are experts in the real estate or financial planning fields. If accepted as a guest author, you will receive a prominent backlink listing as a contributing author from the home page of this website, as well as the freedom to create backlinks within your blog posts to your websites. If you are a real estate or financial planning professional and would like to join my blogging team, ...

Jumbo Rates Coming Down

Wed, 06 May 2009 08:07:58 -0700

Jumbo mortgage rates including Colorado Jumbo Rates are showing signs of life and are starting ease down. A jumbo mortgage is any mortgage that is above the conforming loan limit of $417,000, higher in some high-cost areas. There are more and more signs that credit is easing. The problem over the past 18 months is that jumbo mortgages, not backed by Fannie Mae or Freddie Mac, were liabilities that banks had to hold ...

4.5% Mortgage Rate Rumor

Tue, 09 Dec 2008 10:55:23 -0700

There have been many write-ups by the media recently about the proposed government intervention to drop fixed mortgage rates to 4.5%. 4.5% would be the lowest mortgage rates have been since the 1960's and would be sure to stoke the floundering housing market. So what is the reason for this proposed rate reduction and is it for real? Mortgage rates today sit at the lowest levels we have seen in 2008, with 30 year ...

Stock Market Plunges but Mortgage Rates Go Up

Tue, 28 Oct 2008 10:24:52 -0700

The recent pummeling that the stock market has taken is disturbing in the least, and has hammered most everyone's investment portfolio. How low it will go has yet to be seen. However, with a downturn in the stock market, there is usually a silver lining- lower mortgage rates. But we haven't seen lower mortgage rates when stocks take major downturns. Why is this? To understand what's going on, first it's necessary to ...

Fed Rate Cut = Higher Mortgage Rates

Wed, 08 Oct 2008 07:59:00 -0700

Contrary to popular belief, when the Federal Reserve cuts short term interest rates, mortgage rates almost always go up . This doesn't seem to make sense, so as I sip my coffee this morning and digest the emergency 0.5% worldwide rate cut that happened early this morning, I thought it would be prudent to blog on this topic. So why do rate cuts usually lead to higher mortgage rates? The reason is that rate cuts ...

Fannie/Freddie Takeover Sends Rates Plummeting

Mon, 08 Sep 2008 07:43:32 -0700

The bailout of Fannie Mae and Freddie Mac over the weekend has sent rates plummeting in early trading. The trend is expected to continue and help return some liquidity to the frozen mortgage markets. If you missed out on the refinance opportunity this past spring which saw 30 year fixed rates dip into the low-5%'s for a brief couple of days, now is the time to start thinking about it again! Click here ...

Home Values Drop at Record Pace

Tue, 26 Aug 2008 09:27:12 -0700

Home values as a nationwide average were reported today down 15.9% from this month last year. This is the largest decline on record. However, the drop was less than forecast, so some economists are becoming encouraged that the end of the housing downturn may be in sight. We are seeing signs of life in the Denver area. Many potential home buyers and investors are starting to enter into the market, fearful that they will lose ...

Is Fannie Mae and Freddie Mac Bailout Coming?

Sat, 23 Aug 2008 00:22:57 -0700

The new legislation passed by Congress recently has given treasury secretary Henry Paulson more power to oversee Fannie Mae and Freddie Mac, the troubled home-finance giants. Many feel that this is the first step in an ultimate government takeover of the entities. Whether or not that happens, remains to be seen, but I wanted to post a link to a great article I found in Business Week Online on the topic. This is ...

Live Mortgage Help!

Thu, 21 Aug 2008 05:08:03 -0700

Do you have mortgage or real estate questions? What is happening with the mortgage market today? Where are mortgage rates headed? Mortgage program questions? Wondering how the home loan process works? Whatever your question, I am here to help! Utilize my live chat feature in the upper-right corner of this blog to enter into a live chat with me. If I'm not online, you can still use this feature to send me your questions. I will receive ...

No Closing Cost Refinances: Fact or Fiction?

Fri, 08 Aug 2008 11:42:19 -0700

You have seen the ads: "No Closing Cost Refinance!" "Closing costs are the biggest ripoff in the history of mankind!" "We're making enough money. We won't stick it to you for closing costs!" Whatever these ads say, are they for real? Can you really refinance your mortgage for no closing costs? Well, the answer is yes and no. I don't mean to be ambiguous, but it is true that ...

Unemployment Getting Uglier

Fri, 01 Aug 2008 04:58:10 -0700

Although unemployment numbers can sometimes be inaccurate, and are many times revised in subsequent months after the initial release, it is becoming more apparant that higher unemployment and a weak labor market is here to stay. The unemployment figures releasted yesterday are an earmark of recession, with continuing unemployment claims well over 400,000 which is consideredd the benchmark for recession. Many economists think unemployment will get worse before it gets better. I have ...

5 Myths About Investment Property Financing

Tue, 29 Jul 2008 12:45:07 -0700

The world is saturated these days with real estate gurus who share their secrets on how they became wealthy investing in real estate. Nothing down, other people's money, desperate sellers, foreclosures- they preach get rich quick schemes that seem fool-proof. It is true- real estate can be an investment strategy that anyone can use to become wealthy and financially independent. However, before you jump off the real estate investing cliff, read this article! ...

The End of Cheap Mortgage Money?

Tue, 10 Jun 2008 14:10:13 -0700

With gas and food prices skyrocketing, and unemployment on the rise, the US Central Bank has begun to hint toward a rate hike sooner rather than later. The fear is that inflation will spiral out of control which, coupled with high unemployment, will signal stagflation. Ben Bernanke spoke this morning, and stated that risks to a serious downturn in the economy have abated. With inflation projected to continue to rise in the coming months, ...

Fed Sees Rough Times Ahead

Wed, 21 May 2008 13:19:58 -0700

The Federal Reserve lowered their outlook for the remainder of 2008 in their latest release. Among other things, the FOMC is predicting higher than expected inflation and unemployment, and lower growth. They also added that the recent rate cut was a close call. The release has led to slightly better mortgage rates. For more on this story, visit CNNMoney .

Another Refi Opportunity Lies Ahead

Fri, 16 May 2008 07:55:56 -0700

Bonds are rallying today on the worst consumer confidence numbers in 26 years. This coupled with continued employment weakness and higher oil prices has caused a two day rally for mortgage bonds. The party may not be over yet, however. Technical indicators point toward a potential major rally next week, and yet another refinance opportunity. Rates are already good, but are still higher than the lows we saw in late January and March. ...

Fed Policy Statement to Move Markets

Wed, 30 Apr 2008 09:57:55 -0700

The latest Fed meeting today will include, as usual, a policy statement, which is scheduled for release at 2:15 EST. Many forecasters are expecting a .25 rate cut, but the policy statement, not the cut, may be a much larger market-mover than the actual rate decision. Of particular importance to mortgage rates are any indication as to whether this is the end of the rate-cutting campaign, which would be bond-positive, and could ...

Home Prices RISE

Wed, 23 Apr 2008 12:53:06 -0700

Home prices for the month of February were reported higher by 0.6% in OFHEO's most recent monthly survey (Office of Federal Housing Enterprise Oversight). This was on the heels of a 1.1% decline in prices. So is this a sign that the housing market is rebounding? Unlikely, is my opinion, although a positive number doesn't hurt matters. One thing to keep in mind is that in the spring, people tend to start listing ...

FHA Reform May Happen Soon

Fri, 18 Apr 2008 08:26:15 -0700

The government may come to the rescue of struggling homeowners sooner rather than later. Congress is attempting to pass a bill that would modernize the FHA home loan program and open the door to new home financing and refinancing options for millions. Current FHA guidelines allow for borrowers with less-than-perfect credit or no credit to potentially qualify for a mortgage. However, it is difficult for a borrower who has fallen behind on mortgage payments ...

Earnings Reports Sending Stocks, Mortgage Rates Higher

Fri, 18 Apr 2008 08:17:57 -0700

Major companies have been reporting earnings for the 1Q 2008 over the past couple weeks, and the reports have largely sent stocks higher and mortgage rates along with it. Companies such as JP Morgan, Wells Fargo, and Google have reported better than expected earnings which has led to a buying bias and upbeat mood in Wall Street. Although JP Morgan's profits fell by 50%, the report was much better than expected and has ...

Jobs Data Gets Ugly

Fri, 04 Apr 2008 13:07:24 -0700

Jobs data was released today for March, and showing a decrease of 80,000 jobs for the month. The number was much worse than expectations, and additionally, the numbers for January and February were revised lower as well. The overall unemployment rate sits at 5.1% nationwide, up from last month. Employment data is one of the biggest indicators of the state of the economy and is one of the biggest influencers of mortgage ...

Fannie Mae Tightens Standards

Wed, 02 Apr 2008 04:51:23 -0700

It's not suprise that underwriting standards across the board, with all lenders and loan programs, are tightening up, making it more difficult for borrowers to qualify. The most recent announcement was by Fannie Mae. Fannie has released new underwriting standards, with the key changes being increased minimum credit scores required for qualification, and the "seasoning" period after a foreclosure being increased from 4 to 5 years. Borrowers with a foreclosure in their past must ...

Fed Abandoning the Dollar?

Mon, 17 Mar 2008 06:48:07 -0700

This weekend, the Federal Reserve did two things which are starting to call into question whether the current policy is wise when considering the larger picture. Not only did the Fed cut the discount rate by .25%, not in and of itself a bad move, but they also were behind the bail out of financial giant Bear Sterns, funding the deal to help Bear Sterns avoid bankruptcy. This is on the heals ...

Inflation Eases, Rates Improving

Fri, 14 Mar 2008 06:52:44 -0700

Inflation data was released this morning and came in suprising flat, opening the door for another Fed rate cut next week. Fixed mortgage rates are improving on the data. Remember, inflation is the enemy of long-term rates because inflation erodes the value of a long term investment. The inverse is true also. Tame inflation makes long term returns more attrative, hence improving long term fixed mortgage rates. If you missed out on some ...

Will Fed Liquidity Strategy Work?

Wed, 12 Mar 2008 05:38:00 -0700

You may have seen the headlines yesterday about the Federal Reserve's move to inject as much as $200 billion into the struggling credit markets. The plan would pledge the money in the form of treasury securities in exchange for mortgage-backed securities. The move would help struggling Fannie Mae and Freddie Mac the most. Fannie and Freddie have had liquidity problems recently because of their inability to sell mortgage backed securities on the secondary market. ...