Rates:

Rates continue to remain under the 5.00% mark this week as the role of Libya and Japan seem to be dimenishing their affects of rates.

Lets looks at some data from the week:

-Personal income increased 0.3% and that was in line, while personal spending increased .0.7%.  Both of these showing that the economy is improving.  Remember in past blogs, it will take the consumer to get us out of this mess, not the government.

-January pending home sales were expected to be ou 0.3%, but actually showed a 2.1% increase.  This was pretty good news after the last two reports, new home sales and existing home sales TANKED.  But also keep in mind we in the Treasure Valley are blessed, we are going for our 4th straight month of home sales increases!

-One bad report that kept rates low this week was Consumer Confidence, which slipped from 70.4 to 65.  But this was expected due to the increase in gas prices.

-ADP numbers for employment showed an increase of 201,000, a pretty good sign of recovery.

-And of course the BIG BOY, March unemployment numbers, non-farm payrolls increased by 216,000 and the unemployment rate dropped from 8.9% to 8.8%.

BUT...

One trouble item that came out this week was some of the Federal Reserves Governors came out this week and indicated that the Fed could start to raise rates as early as 4th quarter.  Now anyone who has ever been in politics know that when a government official speaks, they are usually preparing us for something, they just never speak their minds.

Although the Feds Funds rate isn't directly tied to our Mortgage Interest Rates, there is some psychological affect, thus causing our rates to increase also.

Loan Originator Compensation:

The Federal Rule on LO Compensation, that affects all LO's (Brokers, Lenders, Banks) has been delayed for 5 days.  Although I do feel this will go into affect this month.

I am going to have a "Lunch and Learn" on this subject, the 21st of this month, but here is a snap shot.

AND IF YOU THINK THIS WILL NOT AFFECT EVERYONE, YOU ARE VERY, VERY WRONG.

Before, a loan officer could get a origination fee, or a processing fee, or an admin fee or a underwriting fee.  Depending on which lender/bank you deal with.

Then the LO or Bank could charge the Borrower points of the back for a higher interest rate and pocket that money.  Thus being paid 2x.

Now the LO can ONLY receive money from the Borrower, called Borrower Paid Compensation, OR from the Lender, called Lender Paid Compensation.

They CAN NOT under ANY circumstance receive money from both.

So how does this affect everyone:

Borrower:
          1-Borrower Paid Compensation:  Borrower will have to bring in their OWN money to pay the lender, they can no longer increase the interest rate to pay for lender fees.
          2-Lender Paid Compensation:  Lender charges a higher interest rate to pay for all of the borrower's costs, but no money can come from the borrower.
                   Moral of this story:  Borrowers are forking out more money or are getting a significantly higher interest rate.

Real Estate Agents: 
              When the bank is doing a Lender Paid compensation, Lender Credits or Broker Credits are Banned.
                    Moral of this story:  if you clients is short money at closing, rather then the lenders doing a broker's credit, the RE agent is going to have to give the credit.

Banks:
              The real losers in this deal, their loan officers are going to have to take a significant pay cut and we have been informed that most banks are ONLY going to offer Lender Paid Compensation, which means higher interst rates.

Mortgage Brokers:
                 We, finally, are becoming the winners in all of this.  The reason, we will be able to offer clients Borrower and Lender paid comp plans, which means that the borrower will be able to get the lowest possible interest rate.   And when it all comes down to the end IT IS ALWAYS ABOUT THE INTEREST RATE!!!!!

FHA tax hike:

Well not it isn't an actual tax hike, but I feel it is.

On 4/18 FHA will increase their FHA monthly MI from .90% to 1.15%.  Which means that anyone that pulls a FHA case number after 4/17 will have their monthly payment go up by about $30/month for every $100,000 in loan amount.

This doesn't mean you loans has to close by 4/18, what it means is you need to have your FHA case number ordered BEFORE 4/18, and then CLOSE with in 90 days.

The Black Lists:

Did you know there are a few Federal Black List out there of people who are NOT allowed to do Real Estate Transactions?

When we do a loan, we have to check these lists for EVERYONE involved in the transaction, this included:

Listing Agent or agents
Buyer's Agent
Buyer(s)
Seller(S)
Title Company
Title Officer
Escrow Officer
Appraisal Company
Appraiser
Lender
Loan officer
Processor

If any person is on one of these list, the transaction is DEAD!

Time to check:

https://www5.hud.gov/ecpcis/main/ECPCIS_List.jsp

https://www.epls.gov/epls/search.do?multiName=true

There is also another list called CAIVERS, which lenders only have access to.  This is a Federal List for potential Buyers.  People on this list would be people who have outstanding Federal Tax Liens, Federal Foreclosures with deficiencies, Federal Judgements, etc...

Why do I bring this up, well in the past couple of week, I have found one of the above parties on this list, to that person's suprise.

Also, you might want to check up on your lenders, it has been announced that with the new law in affect on 1/1/11, many lenders and loan officer are NOT licensed.  Which makes your transaction NULL and VOID?????

http://www.nmlsconsumeraccess.org/