Virtual Loan Officer :: Mortgage Market

Get a Wholesale Rate Quote!

2006-06-04T08:09:00.000-05:00

In this day and age of technology and sophistication, it still confounds me that the community at large believes that somewhere out there, there is a better "deal" to be had. As much as I hate to use the term "deal" it is used often by people in our industry and the public at large. Referring the best price on a home mortgage, of course, everyone wants the best "deal", but is that possible? When I work with my clients, as I have for 18 + years, I have found that it is beneficial not only for them, but for myself as well, to provide them with a wholesale rate quote. This brings up many interesting questions and possibly concerns about proprietary information, etc., etc., however I prefer to remove myself from the position of sales, educating my customers, making them responsible for the price they choose.

Let me explain.Typically mortgage brokers, bankers and lenders post prices on various loans for consumers with few if no options. As a mortgage broker, I provide the wholesale pricing guides to my clientle so that they can make the decision as if they were the loan officer. This removes my job as salesman, lowering my risk, and placing me on the consumer level, responsible now, for advice on the best way to package the loan, the varous benefits regarding the many types of loans, the argument of high rate-low fee vs. low rate-high fee and everything in between.

Each institution no matter how big or small, ultimately in some form or another sells their loan to FNMA, FHLMC (Gov. Sponsored Loan Agencies) or some other major market conduit.

Essentially, what I am saying is "we all go to the same well for the same bucket of water ".

Follow this link Wholesale Rate Quote and get your wholesale rate quote, then you decide on the rate and points and I'll advise you on how to package your mortgage and get it closed.

Refinance out of your ARM Now!

2006-06-04T07:54:00.000-05:00

Mortgage industry leaders have a warning for people already struggling to make their adjustable-rate mortgage payments: Get out of them now.For many homeowners who bought a home three years ago during the low rate trend, this might be the first big rate adjustment, and it's a doozy

Adjustable-rate mortgages normally start at a lower rate than the traditional 30-year fixed-rate mortgages, and are periodically adjusted to reflect current interest rates — and there are hundreds of different types.

But for many people who bought a home three years ago during the low rate trend, this might be the first big rate adjustment, and it's a doozy.

For those who had been paying about 4 percent interest, the rates could jump to 8.5 percent or 9.5 percent when the rates reset. "It's going to double the payment," said William Hobbs, senior loan officer with Carteret Mortgage Corporation in Manassas, VA. "They could literally see their mortgage double this year."And that's just the first adjustment.

The increases are happening in part because the Federal Reserve has raised short-term interest rates 15 straight times since June 2004. While many adjustable-rate mortgages, known as ARMs, cap increases at 2 percentage points per year.And therein lies the potential disaster.

While ARMs were designed for short-term buyers, Hobbs said many people have used the lower introductory rates as a way to buy a house for the first time. Average interest rates rose last week to 6.49 percent on a 30-year fixed-rate mortgage, according to Freddie Mac, the nation's second-largest mortgage lender. That's up from an average 5.89 percent at this time last year, and it's the highest average since July 2002.

The best advice at this time, is to refinance out of your ARM before it makes that first initial adjustment, get into a 30,20 or 15 year fixed rate while the rates are still relatively low. Use the Refinance analysis calculator to determine what your savings will be. Then apply online or call Bill Hobbs at 888 702-0652

Interest Rates are Up

2005-10-07T01:38:00.000-05:00

McLEAN, VA -- Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market SurveySM (PMMSSM) in which the 30-year fixed-rate mortgage (FRM) averaged 5.98 percent, with an average 0.5 point, for the week ending October 6, 2005, up from last week's average of 5.91 percent. Last year at this time, the 30-year FRM averaged 5.82 percent. This is the highest the 30-year FRM has been since March 31 when it averaged 6.04 percent.
The average for the 15-year FRM this week is 5.54 percent, with an average 0.5 point, up from last week when it averaged 5.48 percent. A year ago, the 15-year FRM averaged 5.24 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.48 percent this week, with an average 0.6 point, up from last week when it averaged 5.44 percent. There is no annual historical information for last year since Freddie Mac only began tracking this mortgage rate at the start of this year.
One-year Treasury-indexed ARMs averaged 4.77 percent this week, with an average 0.6 point, up slightly from last week when it averaged 4.68 percent. At this time last year, the one-year ARM averaged 4.08 percent.
"Mortgage rates have been rising for the last four weeks on inflation jitters caused in part by extended high energy costs. Still we need more concrete data to predict the direction of the national economy, including mortgage rates," said Frank Nothaft, Freddie Mac vice president and chief economist.
"That said, we do think that the economy will continue to grow, albeit at perhaps a slightly slower pace than in the recent past. Mortgage rates will most likely continue to rise with the expansion of the economy."

Fannie Mae Authorizes Purchase of 40 Year Mortgage Loans

2005-06-21T07:54:00.000-05:00

When new cars cost $5,000 consumers took our two or three year car loans. Now they are commonly a five to seven year commitment. Likewise mortgages, which, four decades ago were amortized over 20 years, then 25 years, and now commonly 30 years, may soon have a new standard: 40 year home loans.

After test marketing a 40 year mortgage for some months, Fannie Mae announced last week that it will begin purchasing them. The Corporation acknowledged that changes in "housing market affordability and requests from (our) lender partners" led to the decision to extend the maximum loan term on certain loan products

Fannie will now purchase 40 year fixed-rate mortgages and 40-year hybrid adjustable rate mortgages (ARMS) with initial fixed periods of three, five, seven, or ten years. Not included in the new purchase standards are biweekly mortgage products, loans secured by manufactured housing, loan to value ratios greater than 95%; and ARMS with initial fixed rate periods shorter than three years (including the popular 1-year ARM) or with any subsequent adjustment period greater or less than one year. Also on the no-fly list are negative amortization loans

Forty-year mortgage loans are not new, they have been tried, even promoted in years past and some lenders have continued to write them in special circumstances. When test marketing began a few months ago a number of mortgage pundits soundly denounced them because of the greater interest costs over the life of the loan. Conversely, however, the much lower monthly payment may make the 40-year a good choice for homeowners who have a limited time-frame in which they will own the home or keep the loan. Regardless, with Fannie opening its part of the secondary market to them, look for mortgage companies, banks, and brokers to start strongly marketing various 40-year loan products to consumers.

We are in the BEST of Times

2005-05-27T11:25:00.000-05:00

There was some concern that the economy was sliding back towards a
recession or a no-growth mode. But that was before the solid retail sales
and employment figures were released. We now know that jobs are being
produced and consumers are spending as usual. But even as these solid
numbers were posted, the markets continued to be confounded by the fact
that long-term interest rates are staying low despite the fact that the
Fed has raised rates eight times over the past year. How can this be so?
For now there is no indication that inflation is a long-term threat. This
conclusion is underscored by the fact that the core rate of inflation at
the consumer level did not rise at all last month, even though oil prices
have risen significantly over the past year.

Before 9-11 we had the best of all worlds. Is it possible that the good
times are back? In the late 1990’s we had solid but unspectacular economic
growth, low interest rates, low inflation rates and solid job growth. Put
these all together and this certainly goes a long way towards explaining
why we laid the foundation for a real estate boom in the past six years.
Just add a few other factors such as strong population growth through
immigration and the rise of new mortgage programs such as interest only
and no-downpayment loans and it is no wonder that real estate has been a
sizzling investment. If the real estate boom is to continue despite high
home prices in many places, we really do need the best of all worlds. The
markets seemed to be reacting in a way that would cause the party to
continue—for now anyway.

Real Estate Bubble?

2005-05-17T08:33:00.000-05:00

I cant remember when there was so much hype over one section of the economy just because its doing so good and there appears to be no end in sight.

Its my opinion that everyone needs a place to live, be it a mansion or a doublewide. As long as there is employment and consumers are working steady, there will be a demand for housing. Just look at the housing starts for April 2005, up 11%. In the United States there is a shortage of housing, the single driving force behind the so called bubble is the age old unwritten law of supply and demand.

Interest rates have baffeled me, in past cycles, when the fed raised rates there was usually an equal, if not more adjustment in long term rates. I would welcome input from my readers on why interest rates have remained low, and in some cases (this week for instance) rates have dropped after the fed raised the rate by a quarter.

New Enhanced HELOC Guidelines for PiggyBack Loans

2005-05-07T20:35:00.000-05:00

Effective Monday, May 9, 2005, Virtual Loan Officer is pleased to announce several exciting enhancements to our Home Equity Line of Credit (HELOC)program. These enhancements include:

􀂾 Improved and overhauled pricing structure – better rates for high CLTV/high credit score borrowers and many others.

􀂾 Streamlined and simplified stand-alone HELOC process – close stand-alone HELOCs fast with fewer fees; arrange closings at your kitchen table.

􀂾 Second homes now eligible up to 100% CLTV (Full/Alt Doc); this enhancement will allow the HELOC program to be used to its full advantage behind many eligable first mortgage products that allow a 100% HELOC CLTV for second homes.

􀂾 3- and 4-unit properties are now eligible as both primary residence and investment properties up to 80% CLTV for purchase and rate/term refinance transactions.

􀂾 1- and 2-unit investment properties (Full/Alt Doc) are now eligible up to 90% CLTV – increased from 75% CLTV.

􀂾 State eligibility enhancements – Alaska and Hawaii are now fully eligible (previously restricted to 89.999% CLTV).

Give me a call at 888 702-0652, these enhancements will be a great benefit to those borrowers who are considering a piggyback mortgage of any configuration.

80/20 Piggy Back Mortgage

2005-05-07T14:26:00.000-05:00

A lot of borrowers have asked me if I thought an 80/20 Piggy Back Mortgage is a good idea. To start with, I’ll tell you that the 100% down plan is always the best idea. That way you don’t have any payments. However, I have a really hard time selling people on that plan. An 80/20 mortgage is the next best thing. What this means is that a 20% down payment was made using a HELOC (Home Equity Line of Credit) and the first mortgage is 80% of the value. With this type of loan, you can get a conventional loan and do away with what is referred to as PMI – private mortgage insurance. That insurance is basically foreclosure insurance that pays the mortgage company in the event they have to foreclose on you. On other loans, mortgage companies make you buy this insurance, which costs you about $75 a month per $100,000 borrowed. So you want to do away with that if you can, and an 80/20 loan will allow you to get out of the PMI. There are other variations an 80/10/10 you put down 10% and the most popular is the 80/15/5, you put only 5% down. In some cases you can buy a house that has a jumbo price tag using conventional conforming interest rates as well as not paying PMI. On my web site I have a comparision calculator that gives you a good idea of the savings you can have on a piggy back versus a loan with PMI or a loan with lender paid PMI. you can access this calculator here Piggy Back Mortgage

Mortgage Market, First Post

2005-05-07T13:15:00.000-05:00

This is my first attempt at blogging. Its suppose to be informal and informative, both of which I will endeavor to make this Blog. From time to time I need a soapbox for the shenanagans of all involved an a Real Estate Transaction. From the Realtors, Title and Escrow, Appriasers and of course us lowly mortgage loan officers, originators or what ever rolls off your tongue at the time you are thinking of us.

We all have stories and quotes we would like to publish, if only there was a medium, well now, we have one. Feel free to comment as you like, be kind and no off color language please.