The Market Is Heating Up! (Guest Post)

Today is our first "Guest Post". We are very interested in any professional or referral partner of ours who feel they have valuable content to provide our readers. We constantly talk about what is going on in the mortgage world and current events or feature educational content. However, we want to mix it up at times. In the coming months we are going to make some alterations to our website and our blog. One attempt to do just that is bringing in other experts to let theri voice be heard. Their views will not always echo exactly what Flat Branch Mortgage feels, however I think its benefits far outweigh any drawbacks. Just be patient with us as I am sure we will tinker with this idea until we get it right. Ok, enough of that and lets get to today's post!

The Market is Heating up!
By: Kim Stanley SRES, e-pro, SRS(Re/max Boone Realty

Believe it not , January has become extremely busy for real estate professionals, lenders and title companies, Not only have the number of showings increased, but more homes have been put under contract in the past 2 weeks than in many recent months. The selection is still great, interest rates are still at historic lows, and there is a pent-up demand.BUT IT WON'T STAY THIS WAY. Here are some cautionary predictions shared by many financial gurus:"Although home loan rates are very attractive now, the picture could be quite different as some inflationary factors will likely come to light heading into summer. Oil prices may be on the rise as we approach the summer driving season, some of the economic stimulus might begin to take hold, corporate cost-cutting measures could start to bear fruit, and, perhaps most importantly, the Fed will no longer be a buyer of Mortgage Bonds." (excerpt from MMG Weekly Market Update 1/26/09)Many are advising that if home owners or home buyers want to make a move, they need to do it now to get the best mortgage rates. They also suggest not waiting to lock in rates, hoping they'll go down another percentage of a percentage point. By doing so, you run the risk of a higher rate and possible delayed closing.For those who have been on the sidelines waiting for the right moment to jump into the market, now may be the best time for awhile.

To read more from Kim just click HERE and visit her BLOG.

Kim Stanley, SRES, e-PRO, SRS
Broker/Sales
Remax Boone Realty

Are You A Frustrated Rate Shopper?

With the recent drop in rates we have really seen the phone calls pick up. Shopper's are out in full force calling around for the best deal. Lately I have noticed a slight bit of frustration in some of these people. This stems from the fact that 4.5% rates have been plastered all over the Internet and print media. These callers want this rate and they are finding out that it isn't available! That's right, currently this rate is not available. Actually, for the most part it never was. This rate is what the government set as a goal. By pumping the MBS market with money, they hoped the result would be reduced rates. It did work for a short time and rates dropped in the 4's. Many local or regional banks have taken advantage of this in the short term and some customers found some luck going this route. The problem is that there is a very select few that can obtain the super low rates. They then tell their friends and family and the word spreads! When rates hit their low point in mid December, lenders were flooded with applications. I mean absolutely swamped. In some cases it has taken a full month to just get a loan commitment from them. To help fight off this problem lenders have actually raised rates to deter us from sending loans to them! This will allow them to catch up. This only compounds the problem. Rates never got as low for the masses as people thought they did and now lenders aren't even offering out the good rates they do have. Confused? Wasn't the point to keep rates low? Well these are questions these callers and even people in this profession are asking. Rates will turn around at some point. We hope sooner rather than later. Just remain patient. Also, keep a few things in mind. First, don't get greedy. If you have a $100,000 loan and you are holding out for an extra .125% or .25% lower rate, it is probably a bad idea. This will only save a few extra dollars per month, but you run the risk of rates spiking and you lose the rate you had in your grasp! Second, you should start the application process with a lender you trust. If your file is in underwriting we can lock at a moments notice when the market turns. If you haven't started the process you run the risk of us not being able to lock in time. Not to mention you get a head start on the longer underwriting times. Lastly, consider Flat Branch Mortgage. At Flat Branch we do a couple things far better than our competition. We are unique in that we have a live feed of the bond market and are able to make our own float or lock decisions. We don't rely on some Internet service to tell us when to lock or float. We can save you money this way! We also have in house underwriting. Not every single loan can be underwritten in house, but the majority can. What does this mean for you or for your clients? This means we have total control of the file and we don't have to ship it off and be subject to the ridiculously slow turn times at other lenders! This means faster closings and ultimately in some cases better pricing. How is that possible? This is because we don't have to lock so far out to preserve your rate in order to accommodate the turn times brokering requires right now!
Please remember, rate is important but it is not everything. Especially if you are with a lender that locks you in and has to extend it several times before you close. This ultimately causes you stress and costs money.

So if you are a frustrated shopper, we understand. We are frustrated as well. When you call, we truly want to offer you the best. By this I mean the best rate and the best service. We can do this in the service department, hands down! When it comes to rate we are at the mercy of what the market gives us. If it is possible, we will offer it to you! We want your business and we ask that you give us a shot. We realize we will not be the cheapest every single time, but if you present us a competing offer we will do our best to match or beat it!

Brought to you by:
Flat Branch Mortgage, Inc.
Posted By: Eric Hemmer

Let's Find a Bright Spot......Please!

I have truly been searching for something to hang our hat on moving forward but today did not do us any justice....at least from a recovery standpoint. You see with the economy in a recession and companies sales really falling by the way side we get the following; Sprint laying off 8k, Phillips laying off 6k, Caterpillar cutting 20k, McDonald's (this is McDonald's we are talking about here) is down 24% and Home Depot is eliminating 5k in jobs.

Many are predicting more of the same through the spring. The key to an economic recovery is J.O.B.S. and individuals, couples and families making money, saving money and having money to SPEND. The sticking points in a recession is that it's primary purpose imposes just the opposite thus making it very hard to reverse the trend. To top it off there is such a disconnect between primary rates (the rates offered or trading on Wall Street) and secondary rates (the rates at which consumers can get) that the Fed Purchase Program IS NOT WORKING! I promise to find something "pretty" to read about in the coming weeks but I also must do my part in truly talking about what is fact and not what we "wish" it to be.

Brought to you by Flat Branch Mortgage, Inc.
Your Mid-Missouri Mortgage Lender
Posted by: Shawn Von Talge

So Much for Government Intervention

Well, what once was thought to be a good thing is now gone by the way side and actually sputtered some more. What am I talking about? Mortgage interest rates have gone from one extreme to the other. The morning of December 17th saw ALL TIME low mortgage rates for a period of about 60 minutes from that point till today it has been nothing but bad news for mortgage rates and all the time the U.S. government has been doing most of the buying. For instance on 12/17/08 the 4.5% MBS coupon (the bond that affects mortgage rates high price=low rates) was at 103-06 and today we closed (keep in mind this is the same 4.5% MBS coupon) at 101-04!

Simply put the "media frenzie" surrounding mortgage rates is a complete mirage right now. Be advised that we are no longer in a refinance rally and the one that was underway was the shortest I have seen in 11 years! Let's hope we see some rebounding and quickly otherwise there will be a lot of disappointed consumers out there. Although it seems disappointment has been the norm lately.

Brought to you by Flat Branch Mortgage, Inc.
Your Mid-Missouri Mortgage Lender
Posted by: Shawn Von Talge

Our 44th President

Today Barack Obama was sworn in as the 44th President of the United States of America. Whether you are a supporter of his or not, we all know how truly historic today is. Not only is he the youngest president or the first African-American President, he brings hope to millions of Americans at a time it is sorely needed. We are at war and our economy is crumbling around us after a rocky 8 years under President Bush. President Obama inspires many and has some wonderful ideas of how to resurect this nation! Not everything will work and it won't be easy. We also know it isn't going to happen overnight, but I am confident the right guy is in charge. We all have to do our part, but I do think we will get there! It is just going to take some hard work and patience!

Brought to you by:
Flat Branch Mortgage, Inc.
Posted by: Eric Hemmer

Will Things Get Worse?

The above question is something that seems to be on everyones mind lately. I recently (last week) received 4 phone calls from past clients facing some very serious decisions. Two of them had lost their job due to the current economic woes and the other two had seen their salaries cut by 40%! ALL had serious concerns on how they were going to keep their homes. These people weren't victims of financial mismanagement or irresponsible, they have simply felt the wrath of today's economic reality. Things are bad and they could get worse.

Most economists are predicting 2009 to be a replica of 2008. I know this does not come as "things we like to hear" however, this is the reality of where we are at. Why sugar coat times like these? False hope can only lead to disappointment and perhaps even further stress about the "if's". I for one am fairly optimistic about the gentlemen we have taking office tomorrow and the staff he has put together to hopefully change things for the better. This is not a political forum however Mr. Obama has plans for a $775 billion stimulus package, 2.5 million jobs, financial services reform (yes this includes the "asleep at the wheel" SEC) and a wholesale list of other items that need to be addressed asap! Hold your head up high and stay focused and things will work out. We all will be better people from facing these challenges.....perhaps we cannot see it now but "the mark" this economy has left us will hopefully be erased over time.

Brought to you by Flat Branch Mortgage, Inc.
Your Mid-Missouri Mortgage Lender
Posted by: Shawn Von Talge

Absolutely Unreal Times!

I thought I had seen it all but every time I feel things have ran there course another whirlwind hits us. I'm sure it's no surprise but December holiday sales were down 2.7% and excluding auto's were down 3.1% more than double the expectations by most economists of 1.3% and marked the first calendar year decline ever! The DOW is down over 200 points, treasuries are skyrocketing with yields in the low 2's and guess what our friendly and ever rate influencer (known as MBS) have traded "sideways" for 4 consecutive days which means stagnant mortgage rates.

The primary problem we are seeing right now is the banks not translating today's current economic rate environment onto rate sheets and thus customers. For instance, we have two BIG lenders that are so overwhelmed with business that the only way to keep it from coming in is to raise rates! That way bankers and brokers are forced to use other avenues but hey guess what? Almost all banks are doing this to some extent. Simply put the banks are now too busy to handle the volume of business and do not want to "staff up" to cover it because of fear that this refinance rally will be short lived. The general public cannot win for losing and it's getting extremely frustrating to sit on the sidelines and watch this happen. Ben Bernanke stated yesterday (paraphrasing) "If $600 billion of GSE/MBS buying doesn't do the trick, then we'll buy another $600 billion. And if treasury traders even think about donning the vigilante hat of taking market matters into their own hands in a sign of policy protest then we will set up a bear trap of buying term treasuries in size." Bluntly put stopping messing with our market presence or you will pay!

It's nice to see the government take such an active role in trying to influence consumer rates and in particular mortgage rates however, to date the moves have not been doing what was planned as it seems sellers and treasury traders are making their presence felt!

Brought to you by Flat Branch Mortgage, Inc.
Your Mid-Missouri Mortgage Lender
Posted by: Shawn Von Talge

City of Columbia Home Ownership Assistance Program

Today Flat Branch started making the rounds to local real estate offices to inform everyone about the recent changes to the City of Columbia Home Ownership Assistance Program. In the past this program was only available in the central city. Now it has been expanded to include anywhere inside the city limits! This is a wonderful change. This program offers a $5000 grant for Down Payment and Closing Costs. This program is more valuable than ever with the recent back tracking changes to mortgage products. Gone are 100% programs and most are using FHA loans which carry a 3.5% down payment. This is where this money can come in handy! You can still obtain seller paid closing costs to further assist, which almost everybody takes advantage of these days. I believe there are even additional funds available from the city program on a case by case basis.

Below are the qualification criteria:

Qualification 1 : You must be a first time home buyer (defined as someone who has not owned
a home in three years) or be a single parent. (defined as or an individual who
unmarried or legally separated and who has one or more minor children or is
pregnant.

Qualification 2: Make less than the following income limits:
Family Size / Income
1 person / $34,700
2 persons / $39,700
3 persons / $44,650
4 persons / $49,650
5 persons / $53,550
6 persons / $57,550
7 persons / $61,500
8 persons / $65,450
Important Note: If they are a single person who is not disabled or elderly and are buying outside of the old assistance area (central city), the income limit is $26,025

Qualification 3: Complete the Home Buying 101 class ($10 cost)

Qualification 4: Buy a home which passes the inspection. This includes the city inspection and
a structural inspection.

The bottom line is that the City is stepping up in a big way to do their part to help prospective buyers out and I think it is great! Flat Branch will of course do our part as well. With interest rates currently hovering around historic lows, it makes for a good combination.

Brought to you by:

Flat Branch Mortgage, Inc.
Posted by: Eric Hemmer

The Mortgage Rate Myth

We all know that a small refinance boom is taking place and I cannot say enough how thankful I am to be swamped with business. However, I continue to get phone call after phone call with regards to the "media driven" 4.5% mortgage rates. First, let me say that mortgage rates are NOT at 4.5%! Second, today's environment is much different than the past. We now have "risk based pricing"; meaning depending on the borrowers risk (i.e. loan-to-value, credit score, type of home, and loan amount) will very much influence the rate at which the borrower can get.

For instance; a person with a 700 score, putting 10% down on a single family residence will more than likely get a higher rate than someone with a 740 score putting 20% down on a single family residence. Both are great scores however with "risk based pricing" anyone who has a credit score below 740 will take a "hit" to the rate. Let me reiterate so when you hear your friend, co-worker, or family member talk about the 4.875% rate they got; EVERY SINGLE INDIVIDUAL AND MORTGAGE APPLICATION IS DIFFERENT and NOT EVERYONE WILL GET THE SAME RATE.

It simply seems the media has got the general public fooled to think that if they can't get a mortgage rate in the 4's then something is wrong! Nothing could be further from the truth and ever since we started this "refinance rally" rates have not hit 4.5% not ONCE! So keep things in perspective when you are speaking with mortgage professionals. We want to get you the best rate possible but cannot work magic tricks in order to do it. If you qualify for 5.25% on a 30 year fixed that is a darn good rate! Don't be fooled by gimmicks and rates quoted below what the banks and mortgage companies are telling you over the phone. Are there points, broker fees, bank fees, origination fees, are they "portfolioing" the loan, what are closing costs? These are questions that you need to ask and you also need to know your credit score and loan-to-value.

Brought to you by Flat Branch Mortgage, Inc.
Your Mid-Missouri Mortgage Professional!
posted by: Shawn Von Talge