Mortgages and Real Estate – Week in Review
February 9, 2010
Punxsutawney Phil has seen his shadow and only six more weeks of winter remain. It also appears that the housing market is beginning to thaw with the spring market beginning early – most likely due to the first time home buyer credit which is scheduled to expire in June.
Many have heard horror stories over the past six to twelve months about obtaining a purchase or refinance mortgage. Some people may have been outright declined, or felt like they were pulled through a meat grinder with request after request for more documentation and endless delays in closing a loan. The reason is simple – as Fannie Mae, Freddie Mac and other mortgage holders are hit with more and more loan defaults, they are auditing their loan pools and looking for mistakes, lies or omissions that entitle them to return the loans to the originators.
Reasons for returning loans are various and many – from misstating occupancy to poor documentation of income or assets. According to the Wall Street Journal and Barclays Capital, banks repurchased about $14.2 billion in loans from holders of mortgage-backed securities in the first nine months of last year, up from $3.6 billion in 2008. That certainly makes a dent in banks profits. Underwriters are the gatekeepers to loans that are sold, and they are making sure that all the “i”‘s are dotted and “t”‘s crossed. If any aspect of a loan is questionable, they will err on the side of caution and deny it.
The pendulum has swung from the days of 100% no documentation financing to the other extreme. While this presents a more difficult environment, with good organization and proper documentation, it should not be a problem.
For those who have been declined, following is link to a recent CNN article. It shows that even millionaires can be declined…..often because they did not have the right loan officer working their file. http://money.cnn.com/2010/01/20/real_estate/mortgage_woes_for_wealthy/
For more information contact Greg Dwyer at (617) 899-4399.
The week in review – January 23, 2010
January 23, 2010
The Good News:
Mortgage Rates have balanced over the last two weeks after surging in early January from the record lows of ’09. The average 30-year fixed rate fell 7 points to 4.99% and they are 8 points higher than their average for the same week in 2009.
The Bad News:
The recent news about some economic set-backs have dwarfed Wall Street’s expectations of a fast recovery – a long, slow journey seems more realistic
