Mortgage Info

From: Kelly Brynes Platinum Funding Solutions, Inc

Government Regulation Clogs the Pipes

It's no secret that many facets of lending and real estate have changed as a result of the credit crisis. In addition to tightened lending practices that resulted from rising mortgage delinquencies, Washington has been heavily involved in altering the way lenders do business today.

Two individual pieces of legislation impacting our business need to be taken into account when determining closing dates for purchase transactions.

Home Valuation Code of Conduct
The Home Valuation Code of Conduct (HVCC) went into effect May 1, 2009. Intended to shield appraisers from undue influence from loan officers and lenders, this legislation installed a "firewall" between those individuals directly involved in the origination of the loan from the selection of and contact with appraisers.

HVCC also requires that borrowers receive a copy of the appraisal a minimum of three days in advance of closing. Part of the kicker here is that "received" is considered, in effect, three business days after the appraisal has been mailed to the borrower.As HVCC requires a firewall between the originator and the appraiser, the time to receive an appraisal has increased, in some cases by as much as two weeks or more. While this may not always be the case, it is important to take into consideration when considering closing dates. Today, conservative closing dates are mandatory to properly manage expectations of all parties.

Housing and Economic Recovery Act
The Housing and Economic Recovery Act (HERA) amends and impacts several aspects of obtaining a mortgage, the disclosures required for borrowers, and the timing of their delivery. This impacts the minimum time required to close, and should any changes be made to a loan application that could impact the Annual Percentage Rate (APR), this could impact the closing date.

Other than paying for a credit report, lenders may not accept any additional fees from a borrower until four business days after disclosures have been provided to or mailed to a borrower. This has the potential to delay several aspects of the application process.

Finally, upon making application, a borrower is provided a Truth in Lending (TIL) statement, detailing the total expected costs that could be incurred over the life of the loan. Should anything change in the loan application that could change the APR by more than .125%, a new TIL must be reissued to the borrower a minimum of 3 business days before closing. Items impacting the APR could include a borrower accepting a higher interest rate than initially qualified by floating their rate at application, a change to the loan amount, a change in product, a change in closing date, and any changes to fees.

What Now?
While there is more we can discuss on the specifics of these legislative implications, I felt it important enough to let you know now that I would not recommend you write purchase contracts with short closing time frames.

I will be preparing additional information you can provide both your buyers and sellers to help explain the rationale behind not scheduling closing dates in advance of 30 days at a minimum and ideally not less than 45 days.

Thank you again for your business and if you have any questions, please pick up the phone and call me.

Mortgage News

Sent from Andrea Kindley

Market Comment - Week of July 13th, 2009

Mortgage bond prices had another volatile week with rates rallying midweek as the additional Treasury debt was absorbed well. Foreign demand for the shorter-term auctions was surprisingly strong while the longer-term auction was average. The US Treasury auctioned $963 billion of debt the first half of this year and is expected to offer $1.1trillion in he second half. Weekly jobless claims were not as bad as expected which didn't help mortgage bond prices. However, falling oil prices helped ease inflation fears and enabled mortgage bond prices to increase, which pushed rates lower. Oil was under $60/barrel last Thursday morning. For the week interest rates improved by about 1/2 of a discount point.

The consumer price index data Wednesday will be the most important data this week. Signs of inflationary pressures from any of the data releases will not bode well for mortgage interest rates.

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Economic Factors
Economic Indicator	Release Date Time	Consensus Estimate	Analysis
Producer Price Index	Tuesday, July 14, 2009	Up 0.7%, Core up 0.1%	Important. An indication of inflationary pressures at the producer level. Lower figures may lead to lower rates.
Retail Sales	Tuesday, July 14, 2009	Up 0.5%	Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates.
Consumer Price Index	Wednesday, July 15, 2009	Up 0.6%, Core up 0.1%	Important. A measure of inflation at the consumer level. Lower figures may lead to lower rates.
Industrial Production	Wednesday, July 15, 2009	Down 0.6%	Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Capacity Utilization	Wednesday, July 15, 2009	67.9%	Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates.
Fed Minutes	Wednesday, July 15, 2009	None	Important. Details of the last Fed meeting will be thoroughly analyzed.
Philadelphia Fed Survey	Thursday, July 16, 2009	None	Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Housing Starts	Friday, July 17, 2009	Down 0.1%	Important. A measure of housing sector strength. Larger than expected decrease may lead to lower rates.

Fed Minutes

The Federal Open Market Committee decided in December of 2004 to reduce the lag time between the open market committee meeting and the release of the minutes from six to eight weeks to only three weeks. The minutes from the meeting have the ability to cause mortgage interest rate volatility because they provide more policy details than the standard post meeting release. Most importantly the minutes provide the Fed's complete economic analysis and the various opinions of individual Fed members. There is typically an overwhelming consensus among the members. However, there can also be dissension, which often causes uneasiness in the financial markets. The release often comes and goes without much uproar but keep in mind that if any of the text seems troubling to analysts you can see market volatility.

Remember that mortgage interest rates remaining historically favorable. Capitalizing on current levels is wise amid the recent economic instability across the globe. Inflation fears could be stoked with continued Middle East tension and hurricane season heading our way. Inflation, real or perceived, generally does not bode well for mortgage bonds and could cause rates to rise.

TGIF

The term, "TGIF" started in Akron, Ohio by no other than a disk jockey named Jerry Healy on the WAKR radio station. Now for almost 39 years the term has been used over and over.

So, I hope this for you today...Thank God It's Friday, and enjoy your weekend!

Matt

Summer

I hope all had a great 4th of July. As the summer heats up and the rain here in North Carolina has stopped, I have seen sprinkler systems turned back on and HVAC trucks running around everywhere!

Rentals are continuing to grow and if priced right are moving very quickly. Home sales and buyers are still taking more time on the market than we have seen in years.

Although, Lake Norman is still the best place I have ever lived. The lake has been busy with boats, the new movies coming out have the theaters packed, and last night I tried the new a newer resturant in Davidson called Sabi...worth trying!