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Business As Usual For Lenders

by Connie Erickson
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NEW LENDER RULES WILL NOT CHANGE THE WAY LENDERS DO BUSINESS….According to my friend and Senior Mortgage Loan Officer for Johnson Bank, Laura Seefeldt, there is good news on the horizon pertaining to the long anticipated lending rule changes.  Mel Watt, the head of the FHFA has canceled the implementation of an increase in fees on loans delivered to Fannie & Freddie.  And, more importantly, the significant increase in delivery fees for credit score and buyer loan to value reports have been canceled.  This will help lenders comply with new limitations on fees charged to borrowers and keep rates close to their current level.

Laura also points out that there have been only marginal rate changes in the past four weeks.  For example, On December 13, the 30 year rate was 4.4% and on January 10, 2014 the 30 year rate was 4.5%.  The 7 year rate on December 13 was 3.875% and on January 10, 2014 it was 3.75%.

Overall, I feel this is good news and the Dodd-Frank conditions are not nearly as complicated and restrictive as I thought they would be.  According to Laura Seefeldt, “Johnson Bank has always made loans to borrowers with the "ability to repay" (ATR).  Business as usual for us :)”.


 

Market and Mortgage Rate Predictions for 2011

by Connie Erickson
 

On January 4, 2011, Laura Seefeldt of Johnson Bank spoke with me about financing and predictions for 2011 mortgage rates.

Rates Predicted to Stay Low

by Connie Erickson
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I spoke recently with my friend and lender, Laura Seefeldt of Johnson Bank and asked her if she’d write a guest column for my newsletter. If you are in a position to purchase, it is an excellent time. Laura predicts the rates to stay low. Did you know if the interest rate increases just 1%, you will pay 10% more for the property? Take a look at what Laura shares…………………..



I was recently in another meeting where we were talking about some upcoming changes that the Federal government is going to implement regarding the disclosure of costs and fees, interest rates, points, etc to the mortgage consumer. This comes on the heels of many previous changes in the structure, disclosure and underwriting of all mortgage loan applications. The government continues to require more and more disclosure to the consumer along with tighter underwriting standards and higher fees as it relates to loan to value (low down payments), credit score (above 740 is best), property type (condominiums and investment property) among many other factors.

So as I was thinking about how to reply to Connie’s request for a peek in the future and forecast into the remainder of 2010 and into 2011, I recalled this meeting along with the events of this past year believe we will continue to see the trend of tweaking and tightening the current regulations.

During this meeting we also discussed the direction of interest rates and were informed that Freddie Mac forecasts that mortgage rates will be in the 4.5% - 5.0% range over the next 3-6 months. However, much will depend on the continued willingness of the Chinese to purchase US Treasuries and the overall recovery of our economy which remains sluggish at best. Two factors that continue to drag the economy is jobs (unemployment at 9.6%) and home values. A total of 716,128 homes were seized from delinquent homeowners during the first 8 months of this year. That’s almost 3,000 a day!!

Further, in the US today there are 3 million job openings and 15 million unemployed. That’s 5 out of work Americans for every 1 job opening.

Laura Seefeldt
JOHNSON BANK

Lenders Pulling 2nd Credit Report on Buyers

by Connie Erickson
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Under Fannie Mae's new Loan Quality Initiative (LQI) that went into effect on June 1, 2010, lenders are pulling a second credit report on the buyer right before closing to verify that the buyer's credit status has not changed and that all debts were disclosed. In other words, the buyer is not officially approved for the mortgage until the second credit report is approved. The lender may also re-verify job status and check other sources to make sure there are no undisclosed debts.

Other lenders also have been known to pull second credit reports right before the closing, but the Fannie Mae LQI will likely cause many more lenders to conduct last-minute verifications.

What this means for buyers is that they are well advised to not make any major purchases or apply for new credit until after closing. For instance, applying for a new credit card may lower a buyer's credit score. Under the LQI, the lender could delay the closing, increase the interest rate or the down payment, or even cancel the closing, depending upon the actual change.

"It seems everywhere is requiring credit checks nowadays. Credit inquiries, although not a serious hit, still can reduce a credit score. I was setting up my utilities before closing, and each one of them requested a social security number and credit check to get utilities set-up. I refused to have them check my credit, and instead paid the cash deposit for setting up a new account. I get the deposit back in 4-6 months, and it prevented any dings to my credit before closing." -Scott MacCallum (recent home buyer)

Incredibly Low Interest Rates

by Connie Erickson
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Jodi Kaye, a lender in Door County says she has money available at 3.99% for a 15 year and 4.55% on a 30 year loan.



If that rate increases 1%, you will pay 10% more for the property you buy. The time to buy is NOW, call me or email me to discuss.

From the Lender's Point of View

by Connie Erickson

On February 11, 2010, my friend and local lender, Laura Seefelt of Johnson Bank spoke with me about 2010, home loan interest rates and what we're in for this year. It is a good time to invest in Door County real estate.

Displaying blog entries 1-6 of 6

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Photo of Connie Erickson Real Estate
Connie Erickson
Door County Realty, Inc.
Po Box 340 - 4027 Main Street
Fish Creek WI 54212
Office: 920-868-2075
Toll Free: 888-678-3949
Fax: 920-868-2425

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