Volatile Rates

If you monitor rates on our website you will notice today that rates spiked! Rates are extremely volatile right now and today was brutal. Good news came out today that job losses were 247,000 in July. Why is this good? Well it really isn't, but it sure beats the 443,000 they were expecting. This news caused MBS prices to plummet! MBS prices as most of you know influence mortgage rates and thus here we are. We are at the highest rates we have seen for a long time. With that being said, 5.75% is still great, but everyone wants the high 4's or low 5's that have been the norm for awhile. Be sure to contact one of our loan officers for a more tailored quote for your situation. Your quote will be specific to you and there are some things you can do if you want your rate lower. Don't panic because next week were surely are poised for a rebound. Rates actually got worse everyday this week, so something is bound to happen for us soon. If you haven't locked yet and you close pretty soon, get on the horn with your loan officer and decide how to act. If you have some time, then I would relax and just keep in good contact with your loan officer so you are on the same page. When we do rebound you can take advantage and this little spike will not have hurt you.

On a side note you I wanted to comment briefly on your blog and website. We have been swamped lately and we are still working through numerous kinks on our new website design. Once these are done and everything goes live, it is our hope to keep the blog, newsletter, etc more frequent. With the new site our newsletter may not be as necessary and we may shift away from it since the new site will do a much better job at keeping everyone in tune with the market.

Have a great weekend!
Flat Branch Home Loans, Inc.

Good Article " The Market is showing signs of life"

I read a good article today that appeared in The Columbia Tribune. It is titled "The Market is showing signs of life!" This is music to all of our ears after a few tough years. Notice it says "signs" which means we are not out of the woods yet by any means. However, it sure beats the constant negativity that the media portrays. We all know times have been tough, but Columbia has stayed strong for the most part. We have had our share of struggles like most communities, but Columbia is tough. Follow the link below to read the story

http://www.columbiatribune.com/news/2009/jul/14/market-is-showing-signs-of-life/

Local realtor Sean Moore is featured and some good points are brought up by him and Carol Van Corp , CEO of the Columbia Board of Realtors.

We have had a great year as well and I know we are all working hard to keep the momentum going. Congrats to everyone and please keep it up!

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Flat Branch Home Loans, Inc.

HVCC News!

We have all no doubt already run into flaws with the HVCC Legislation already in place. I know I have. I could go on and on about my views, but I wanted to report that some new legislation has been introduced. Now this isn't in effect yet, but there has been enough fight by the NAMB and NAR that people are starting to take notice. Representatives Childers (D-MS) and Miller (R-CA) introduced legislation requesting an 18 month moratorium. This will be great and hopefully this will allow enough time for either the kinks to be worked out or the HVCC in its original form scrapped altogether. The HVCC was put into place for good reason. However, the problem is that it was rushed and the full ramifications were not thought out. NAMB President Marc Savitt was quoted as follows

"In the period of time since its implementation, the HVCC has increased costs to consumers and decreased the quality of appraisals and has provided a lever of uncertainty in an ailing housing market. Tens of thousands of consumers have already been robbed of their opportunity to enjoy historically low rates by Attorney General Andrew Cuomo's rule."

You can view the full NAMB press release here.
Everyone keep your fingers crossed and hopefully this will get done!

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Flat Branch Home Loans, Inc.

Comparing Closing Costs

As most of you are aware, interest rates have taken a beating lately. This has left numerous people that are already in the purchase or refinance process a bit frustrated. Most people I encounter have found us through a referral source that was based on our reputation for providing our borrowers with competitive prices to go along with great service. With this being the case the borrowers seem to be less concerned about rate and fees because we have come highly recommended. Now don't get me wrong, there are still many shoppers out there and there is nothing wrong with it. This type of volatile environment naturally breeds more shoppers as well. When rates are stable the shopping process for a borrower is a bit easier. When rates are super volatile it can be quite a headache. I have dealt with several rate and fee shoppers this week and I sense their pain. They talk to a lender and get a quote, talk to a few others, and then by the time they make their decision rates have changed again. Therefore the subject of this quick post is meant to help shoppers compare lenders costs. Every lender has different fees and they all seem to disclose them a bit differently. When providing a Good Faith Estimate a loan officer should itemize ALL fees associated with the transaction. What I have found is that some of our competitors only list their fees. I suppose their thought process is that escrows, prepaids, title, etc. will be the same no matter who the lender is so why list them and confuse the borrower? The reason they should be itemized is because they WILL be there and the borrower needs to be aware now and not surprised at closing! So when you are out shopping around make sure all these fees are itemized and find out which ones go to the lender and which ones are 3rd party fees. This will make the comparisons much easier. When it comes to rate just be patient and ask questions. Find out if there are points associated with your rate quote. Find out if the rate could be locked that day? If you have a property address and they can't lock that day then you know they are sugar coating the rate. Some loan officers do this so that their rate sounds good and then they rely on the market to improve to lock you in at the quote. A very risky game to play! If someone start dancing around your questions then they either are hiding something or simply are not experienced enough. If you shop this way you will be able to tell who the experienced and professional loan officers are.

Happy Shopping!

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Flat Branch Home Loans Inc.

Home Inspections

Buying a new home is an exciting time. I love seeing the joy on clients faces when that new home or dream home is finally theirs! However, I wanted to take this time to talk briefly about one aspect of the home buying process. This is the Home Inspection. This is one area that we as a lender do not handle. As a buyer it is your choice if you want one or not and once you enter into a contract it is the next step. Just don't get so excited to get to the closing table that you skip this step or get scared away by the cost. This is a very important aspect in the process. Nobody wants to close on the home and then find out all new plumbing is necessary or foundation problems arise. These are just a couple things that can be uncovered in a home inspection. I am sometimes surprised how a couple can get so emotionally attached to a home that they are willing to overlook certain issues. If you have ever owned a home you realize that unexpected things will come up from time to time and having the money to address them is key. (This is where that $8000 Tax Credit can really come in handy) Wouldn't you like to do your due diligence ahead of time to fight off as many future problems as necessary? So get with your realtor and have an inspection done. They will know of some good inspectors and we as a lender do as well. Just ask. The small cost of the inspection is nothing compared to the money it could save you if you catch a problem now instead of after its too late! Almost everyone asks for seller paid closing costs anyway so this is just another item that that money can be used for. It is a great time to buy a home, just don't rush it and things will work out just fine!

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Flat Branch Mortgage Inc.

Wacky Week

If you receive our weekly newsletter you already get feedback on the MBS market and what rates are doing from week to week. However, the process of monitoring rates on our end is a day by day and sometimes minute by minute process. We have to be on our toes at all times in order to properly serve our borrowers. When borrowers are quoted a rate, they expect us to deliver. We do this by watching the market like a hawk. By doing this we don't put ourselves in the position of quoting a rate off the cuff and not knowing what really is going on. This week was truly wacky. It was a short week due to the holiday and then Wednesday and Thursday were absolutely atrocious for mortgage rates. We have experienced a nice rebound so far today. We of course hope this continues on into next week so we can gain everything we lost. Currently all programs sit about .50% higher than they were to start the week. Not a good sign if you were floating your rate. I for one got all of my people locked prior to, but I am sure not every borrower out there with our company or others were as lucky. The good news is that rates should rebound again and everything will work out, but this is not always the case. Therefore the borrower and the loan officer must be smart when evaluating what is right for the client. Most of the time it is not worth it to risk floating if any nervousness is present.

When I say we monitor rates like a hawk, here is a small snippet of what I am talking about.
Shawn Von Talge does our company analysis of the MBS market and we are notified numerous times a day what is going on. The snippet below is an example:

You will notice my posts coming out a little later from this point forward. Why? Because with spreads this wide volatility as REALLY picked up so I want to get a sense of the DOW and other factors before sending out information. Yesterday marked a VERY up and down day and today (cross our fingers) has really been one directional since open (7am)…………..up! We currently just busted the 100-07 (STAGE 1) and are on our way to 100-10. This is 18 ticks higher from going out levels seen yesterday or (50% additional in yield). Again some other "great" signs to note are the fact that the 4.5%, 4.0%, and 3.5% coupons are all the vintages of choice with the 4% up 23 ticks and the 3.5% up 25 ticks. Again the plan remains the same………stay patient and look for the us to reach and surpass each stage little by little. Again just so you know what stages I am referring to I have outlined them below.

STAGE 1: 100-00
STAGE 2: 101-00
STAGE 3: 101-14
STAGE 4: 101-20
STAGE 5: 101-25
STAGE 6: 102-00

Could we have retracement………..yes we could and probably will but remember what I stated on my previous posts. When we hit levels like this before 11 out of the next 13 days saw higher prices and hence lower rates. So trust in the technicals, be patient and don't panic and these should work out. I personally want to see us gain back a little at a time. Why? Because lenders are more likely to transfer spreads and yields to us if we gain little by little rather than having just a monster day and gain it all back. If that happens they will most certainly hold significant yields back to gauge retracement risks and help with capacity issues. All of today's gains is coming in the wake of a DOW rally……………….a REALLY good sign.

So as you can see this stuff can get pretty technical and most of this means nothing to you, but if you deal with it everyday it makes sense. I wanted to illustrate this to you so you realize what goes into evaluating the market and what steps we take to protect our clients. It can never be 100% right, but it becomes absolutely critical information to a mortgage originator in today's market!

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Flat Branch Mortgage, Inc.

Don't Get Too Excited About Tax Credit Bridge Loan.

Surely by now we have all heard about the $8000 Tax Credit being offered to first time home buyers. If you haven't just look back in our Blog archives and you will find some good educational content regarding this exciting credit. Shortly after the credit became available MHDC started offering a "bridge loan" that allowed people to tap into the credit early. They would advance the borrower the majority of the $8000 so it could be used for a down payment etc. Then when the borrower receives the actual credit, the bridge loan would be paid off. Now the government is stepping in and getting the word out on some FHA changes that will allow lenders to do the same thing. This news has generated more buzz as the word spreads. Just don't get too excited about this, because the details are sketchy at this point and lenders are doing their due diligence to see if it is something feasible to offer. The way I see it, this is a very risky thing for a lender to take on. The lender is fronting the money and hoping it gets paid back. I don't see too many lenders jumping on board. I know we cannot offer this at the present time. That isn't to say we won't evaluate this again in the near future as more details come out. The MHDC program comes with a higher rate than FHA so most people are not even bothering with it. FHA only wants 3.5% down so most borrowers have that anyway and they just sit back and wait for the $8000 perk later. Another way to look at it is this. With everything going on in today's economy, I would recommend stashing that money away in liquid savings or investing it rather than plopping it down on your home. That amount of money will not make a huge difference in your payment or avoid monthly mortgage insurance. Most first time home buyers don't think about the expenses that can come up in owning vs. renting. When that furnace goes out, it is on you. Do you have reserves to cover such an issue? When that money is not in your savings and is in your home equity, tapping into you equity is next to impossible in today's lending environment. Just some food for thought. We will definitely keep you posted as more details come available!



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Flat Branch Home Loans, Inc.