Climbing the Ladder

Now more than ever our industry needs true professionals to take the bull by the horns and step up and make a name for themselves. So in light of this I wanted to share with our readers some of the highlights and educational designations I have achieved over the past couple of months.

1) Lending Integrity Seal of Approval: I recently completed the requirements for this designation and hopefully any day now will be recognized by the NAMB (National Association of Mortgage Brokers) as an individual with a higher ethics and educational standard.

2) Nominated for the MAMB (Missouri Association of Mortgage Brokers) Board of Directors: Ken Louks the former President of MAMB has nominated myself as a future board member. I am greatly looking forward to getting involved in the governmental affair issues facing Missouri mortgage brokers and will do my best to represent us well.

3) Started preparing for my CMC (Certified Mortgage Consultant) designation: I am in the very early stages of the paperwork associated with this but am very much excited about furthering my educational background.

4) Mortgage News Daily Blog Contributor: Some of you may have actually used this free service and I must say the gentlemen behind the insight (whom I will not name) is extremely knowledgeable on the mortgage rate environment. At times I help lend some perspective on what I see in the mortgage rate market and my opinion on the avenues affecting them.

5) Scotsman Guide Author To Be: I recently wrote an article that will be published, hopefully sometime in October by the Scotsman Guide. I will give you further details as they become available but as of last Friday I did sign my Authors Contract for this publication.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

Exciting Time For Columbia On The Horizon!

I know, I know this title probably made you say "Yeah Right" if you are in the Real Estate/Mortgage Industry. However, it is an exciting time on some fronts. Which ones?
Well summer is winding down and I would imagine most people are putting the finishing touches on their summer plans or vacations. I know I just got back from a quick trip that was long overdue! It is always refreshing to take a break! Another exciting topic is the fact that the highly ranked Missouri Tiger Football teams season is nearing! There is a lot of buzz floating around about this season and everyone seems to have high expectations. It should be awesome! The upcoming school year is also right around the corner. With the expected increase in the incoming class, the rental market in Columbia should be booming. With Football home games and the students back, more money will be pumped in the community! We all know that the local economy will benefit from this! Anytime this happens there should naturally be a ripple effect that will benefit most people in a positive way. I hope our industry will benefit a little bit from this!

We wish everyone a prosperous coming months in the real estate world and hopefully we will have the pleasure of working with you. If not, hopefully we will see you at some home football games rooting on the Tigers! It should be fun!

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"

The Freddie Mac Bomb!

Well it shouldn't have come as a surprise but Freddie Mac the world's 2nd largest buyer of mortgages lost $821M in the second quarter 08 compared to a profit of $729M a year ago. The news shocked Wall Street as most analysts were only figuring a loss of .38 cents a share but in reality received $1.63 a share. Hence, Freddie's stock has lost 20% already this morning. The reality of this financial news will hit the real estate community hard as Freddie's results have shaken investors confidence and as a result MBS (Mortgage Backed Securities) have sold off big time and are currently down 45 basis points. What does this mean? Higher rates will be a certainty this morning.

Fannie Mae the world's largest buyer of mortgages will release their second quarter results on Friday so we could be in for more bad news. Not that this comes as a big surprise but I think investors are looking for the bottom in this mess in order to instill confidence in their (Fannie & Freddie) financials. Certainly the moves made by the government toward the end of last month gave some creditability to the government sponsored agencies but the fact remains that the companies poor performance, concern over capital requirements, the ability to raise capital and the struggling sector for which they must profit on have really hit these companies in a big way. The bottom line when deciding to invest dollars in a company is it's ability to make money and right now there are big concerns whether or not this is possible in the near term future.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

Does Your Broker Fight for You!

In today's volatile market changes are coming in bunches. It comes as no shocker that programs are being cut and underwriting guidelines are tightening! With this comes a very important point I would like to focus on. Does your broker or loan officer fight for you and your loan. I am not talking about trying to quote you a low rate to get the deal. This is after you have done your comparison shopping and picked your lender. If you don't know the answer to this, you should do your homework to find out if the lender you are working with has the experience and work ethic to get the job done.
Number 1, the broker should discuss with you ahead of time what potential issues your loan will have. By doing this, you know exactly what to expect and this is critical. Why is it critical? With today's super tight underwriting guidelines your broker can run into several road blocks throughout the loan process. If your broker doesn't know how to deal with these situations, your loan could be turned down for a silly reason! Believe me it happens. I would like to think an underwriter knows their stuff, but this isn't always the case. I have run into several underwriters that give you an answer or decision and they are just winging it rather than doing their homework or asking a supervisor. You are not doing your job as a broker if you aren't keeping them honest! Just this week we encountered 2 cases where we fought for our borrower and got an issue resolved after the underwriter had declined the loan. They see so many files and they are not in tune with the file like we are. You simply cannot just give up and go with whatever the underwriter says. If it makes sense that the file gets turned down, then fine. Not to make light of the foreclosure problem, but it is obvious that many loans over the past few years should have been turned down! However, if it doesn't make sense you better believe we will fight it! Underwriters are not taught to think outside the box and frankly this isn't their job. As a broker you have to point out the obvious and many times this is all it takes. At PMG we have been handed many files that failed at other lenders. On numerous cases we have been able to close the loans after working hard to fight through a few bumps in the road. An experienced broker should be able to do this for you!

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"

Revised Bill Concerning FHA Down Payment Assistance

Hopefully by now, especially given our latest blog post you understand the impact of H.R. 3221. A bill signed into law by President Bush last week revamping the mortgage industry and more significantly Fannie, Freddie and the FHA lending program. One of the key components of the FHA legislation was the removal of DPA (Down Payment Assistance) from the program. Basically this was a fairly unique program in which the sellers actually made the down payment for the buyers typically built into the sales contract and resulting in an inflated sales price. This was fine as long as the home appraised for the necessary value and has operated pretty well given today's environment.

In my opinion the removal of the program was far more significant than what many people think. Not only do the buyers have to come up with the money out of their own pocket but instead of 3% it is now 3.5%. In a market already starving for buyers this action simply adds fuel to the fire in the ever growing struggle of some normalcy in the housing market. The NAMB (National Association of Mortgage Brokers) and now a couple of U.S. Representatives agree that this change is a mistake. On Thursday July 31st H.R. 6694 was introduced by Al Green (D-TX), Maxine Waters (D-CA), Gary Miller (R-CA) and Christopher Shays (R-CT). This bill aims to reverse or revise the requirements for the seller-financed down payment assistance. NAMB will work in conjunction with Congress to reinstate this vital program that has helped so many Americans achieve the dream of home ownership. Only time will tell whether or not this battle can be won as FHA has experienced significant losses as a result of this particular program.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

New Housing Law Passed!

Yesterday President Bush signed off on the housing rescue law. This easily passed the House and the Senate and then was passed on to the President. He initially had indicated he would veto this, but announced recently he had lifted this threat. This is a controversial measure, but one that looks to be necessary during these tough times. It remains to be seen whether this will work, but it surely can't put us in a worse position that we currently are in. It is obvious that the government, the financial sector, and economists are pulling out all stops to try to help. As an example recently we have the passing of this housing rescue bill, Project RESTART, and news of a mortgage plan in the works that will try to utilize covered bonds in a shift away from the normal securitization method. These are 2 big steps. Like I said before, we will have to wait and see if they work. Since we are not yet at the bottom of the housing crisis, it will more than likely awhile before we actually know the answer.
Since the big news is yesterday's housing rescue bill, I wanted to highlight the key components for you. They are as follows:

• The FHA will be allowed to insure up to $300 Billion in new 30 year Fixed rate mortgages for at -risk borrowers in owner-occupied homes if their lenders agree to write down loan balances to 90% of the homes current appraised value.

• A Stronger Regulator for Government Sponsored Enterprises

• A permanent Increase in Conforming Loan Limits. This will permanently increase the loan size cap on Fannie and Freddie guaranteed mortgages to $625,500 .

• A New Home-Buyer Credit. This includes a tax refund for the first time home buyer worth up to 10% of purchase price, but not to exceed $7500. This actually looks like this must be paid back interest free over the course of the next 15 years. So keep that in mind.

• A ban on down-payment assistance from sellers.

• An increase in the down payment requirement for FHA loans. Now 3.5% instead of 3%.

• A new affordable housing trust fund will be established and paid for by fees from Fannie & Freddie.

• Grants to Stated to buy foreclosed properties. This allows states to buy and rehabilitate foreclosed properties.

• The Treasury will lend a temporary financial hand to Fannie and Freddie as long as they deem it necessary to stabilize the market.
  
  
• These are the highlights of this new bill that was passed into law.
  
  Your comments are welcomed.
  
  Brought to you by:
  Professional Mortgage Group, Inc.
  "Your Columbia, MO Mortgage Broker"

USDA Funds Secured

As most everyone knows the lending environment has changed drastically the last 12-18 months and with this has come the elimination of the Fannie Mae and Freddie Mac 100% loans as well as more strict and scrutinized lending guidelines. As alternative means to try and fill this niche the familiarization and utilization of the USDA / "Rural Development" loan has taken the lead as one of the biggest growing programs. Volume for this program has almost doubled since Fiscal Year 2007 and is accelerating. USDA (United States Department of Agriculture) is adding approximately 50 new participating lenders each month. The tremendous growth and utilization of this program has put a strain on the original appropriation amount of $4.1 billion plus the $1.5 billion of carry over and disaster funds. USDA guarantees are limited by the budget; so when demand exceeds supply additional funds must be sought and found.

To try and meet the demand for the program USDA Secretary Ed Schaefer has directed $1.1 billion of additional guarantee funding be moved into the Section 502 Guaranteed Loan Program. This program has become very popular for two very specific reasons. First, its currently the only 100%+ financing available in today's market. Second, in case of default the USDA guarantees 90% of the financed amount so the risk to the servicers and holders of this product are extremely limited. Continue to check back for updates as we will do whatever is necessary to keep our audience up-to-date with ongoing news and changes.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker