Service First Mortgage » Economy

Texas Housing Market

texasbestloans — Sat, 22 May 2010 13:17:19 +0000

Back in the old, pre-financial market meltdown days, mortgages used to be among those products which benefited from these kinds of flight-to-quality moves. Today’s new securities, of course, have market and interest rate risks, but are built from mortgages comprised of much better borrower stock than those of a couple of years ago. This being the case, and with risks associated with investing in mortgages at the beginning of what should be a long decline, they may be becoming more attractive to investors seeking to park some cash. If so, that’s good news for housing market moving forward. We’ll see.

Our office has definitely seen a slow down in website visitors, loan applications and preospects seeking rate and loan qualification. April showed year over year sales improvement, but it may only do to the fact that late spring and summer homebuyers moved their purchase plans forward to take advantage of the first time and mover up tax credit. Time will tell, but we are fortionate to be in a steady housing market with increasing sales and flat to moderate price appreciation.

FHA Reform Act HR 5072 Passes House

texasbestloans — Fri, 30 Apr 2010 17:47:37 +0000

The House Financial Services Committee approved the FHA Reform Act of 2010 (H.R. 5072) to ensure that the Federal Housing Administration (FHA) remains viable and continues its mission of insuring mortgage loans.

Congresswoman Maxine Waters (D-CA), Chairwoman of the Housing and Community Opportunity Subcommittee, said yesterday she drafted the bill in response to recent events that caused FHA’s reserves to fall below the two percent level required in law. This is the same woman that suggested that we keep rates low. Doesn’t she understand that by increasing MI premiums .50% is the equivalent of 2 percentage points? This is absurd!

According to a statement from the committee, the Act will empower FHA to improve its financial position by allowing the agency to adjust its premium structure for new borrowers, while still providing affordable mortgage insurance to the individuals FHA is intended to serve including low-income and minority borrowers and individuals in traditionally underserved areas

“The economic crisis that started a couple of years ago and declining home prices have caused FHA’s capital reserves to deteriorate in recent months, but under the leadership of Secretary Shaun Donovan and FHA Commissioner David Stevens, FHA has taken unprecedented administrative and regulatory steps to improve risk management and root out bad actors participating in the program,” Congresswoman Waters said. “This legislation makes essential reforms to strengthen FHA’s finances.”

H.R. 5072 creates a new Deputy Assistant Secretary at FHA for Risk Management and Regulatory Affairs and provides the agency with enhanced authority to terminate lenders’ approval to originate or underwrite loans backed by FHA insurance when it finds evidence of fraud or noncompliance.

In addition, the bill requires FHA to improve its internal reporting systems to better manage risk and to provide transparent data to the public and to Congress. This includes improving monitoring of early defaults and claims, tracking mortgage information by loan servicer, and providing FHA with the ability to contract out for additional credit risk analysis.

The bill still needs approval by the full House and the senate before it’s signed into law. A Senate Version has not yet been introduced.

Write your congress and stop this bill now!

How Greece Could Effect US Rates

texasbestloans — Thu, 29 Apr 2010 14:59:43 +0000

Two days ago S&P down-graded its debt to junk status. S&P accomplished what politicians had yet to do, get going to work out some plan to keep Greece, Spain, Portugal and Ireland from moving ever closer to defaulting on their sovereign debts. Prior to S&P’s move Germany was taking a strong stand that no help would come unless Greece had a plan that was workable to lower its spending and reduce its external debt. Since the S&P downgrade the momentum is increasing rapidly to come to some resolution as the entire EU system is at risk. The euro currency has fallen from $1.52 to 1 euro to $1.32 to 1 euro. This morning German Chancellor Merkel said that bailout negotiations with Greece must be accelerated, signaling urgency on aid for the first time as Europe’s debt crisis spreads. “It’s completely clear that the negotiations between the Greek government, the European Commission and the IMF need to be sped up now,” Merkel said. “The stability of the euro zone is at stake and we will not duck our responsibility. But the condition is that Greece accepts an ambitious program so as to restore markets’ confidence in Greece.” Her remarks follow additional credit downgrades downgrades to Greece and Portugal yesterday that drove up borrowing costs from Italy to Ireland and boosted indicators of corporate credit risk around the world.

How Recent Market Changes Can Affect You

texasbestloans — Mon, 18 May 2009 01:42:17 +0000

As the Real Estate and financial markets continue to move up and down, mortgage rates can also be affected. Since mortgage rates are more closely tied to the bond markets, an up or down move in the stock market may not have the result in mortgage rates that one might expects. In fact, many times the resulting mortgage rate changes are counter-intuitive.

More importantly, rates change daily and they can change quickly. Some mortgage professionals have recently noted that their rate quotes have only had shelf lives of three to four hours before market changes have deemed them inaccurate.

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How does a consumer navigate fast changing markets in order to refinance their existing loan or purchase a home with the most favorable terms possible?

Plan – Define your needs ahead of time, do not wait until the last minute. This is especially true of home purchases.
Consult – Talk to your mortgage professional on a regular basis so they can interpret recent market events to you and communicate how those events can affect you.
Execute – When you have defined your needs and have determined that now is the best time to move forward, don’t shop yourself out of a good loan! What does this mean? It is easy to get caught up in shopping for the best rate, but it is not uncommon for home owners to miss locking their loan at a great rate because they are in search of better rates that do not exist or that they do not qualify for. It is important to shop to insure you are getting the best rate possible, but set limits to the number of companies you are going to consider doing business with and be careful of having your credit report needlessly and more times than is necessary!