Rates
What a week and it was all about oil!!
Rates this week improved to their best levels of 2014, with conventional ticking down into the 3’s, and government ticking down into the mid 3’s. Also investment properties with 20% down ticked into the mid 4’s!
If it was about US news, again, rates should of shot up:
-Wholesale inventories +0.4% vs est. of +0.2%
-Retail sales for November +0.5% vs. est. of 0.1% (HUGE number!! Should have sent rates up atleast ¼ of a point!)
-Jobless claims 294K vs est. of 295K, still under 300K, which is good!
-November PPI or inflation at producer level 0.0% vs est. +0.1%, NO inflation, good for interests rates, but could bring on another issue, deflation???
-Consumer Sentiment 93.8 vs est. 89.5, another HUGE number showing consumers are happy in the market, should have sent rates higher again!!
But with all of that news, rates improved this week to their 2014 best levels, on:
-Oil, lots of concern, with oil dropping, there is less and less profit by big oil. Exxon pulls oil out of the ground for about $40 per barrel, this pay for it from ground to refiner. But as oil slides, the profit fall, and there is talk about potential mass layoffs in North Dakota and other areas in the US. So low oil is good for you and me, gas is less, but bad for the overall economy.
-PIIGS, if you don’t remember the PIIGS, look back to some of my blogs, it stands for Portugal, Italy, Ireland, Greece & Spain. Well looks like the PIIGS are making the comeback, Greece is in turmoil again, and have elected a PM that doesn’t like the European Union, and may pull out. This would be a HUGE blow to the UE and could be the start of it crumbling, which would cause collapse of the UE, and thus European investors fleeing their stock market for our Bond market.
-China’s economy is stumbling also, and Russia is falling hard as well.
So these areas are causing US investors to pull money out of Stocks and Commodities (Oil) and putting it into safe havens like US bonds, thus pushing rates lower and lower.
Right now we are spoiled on rates, so if you don’t have the nerve, lock them. But most people feel rates could continue to slide with conventional into the Mid 3’s and Government into the low 3’s again.
I am neutral right now, although I feel in the next couple of weeks we could see a correction, both in Oil and Stocks, as the Bulls may come out, but it should just be temporary.
My Community 97% loan.
Well it wasn’t just too long ago, say 2011, when each week my blogs came out about lenders tightening guidelines, so tight that even the best people were having a hard time getting loans.
Flip forward to 2014, and now it seems each week, more and more lenders are loosening guidelines!
Fannie Mae & Freddie Mac announce the return of the MyCommunity loan, it was a GREAT loan before, and is a AWESOME loan now!
Flyer located on my web site here: My Community 97 Flyer
Basically a borrower, can get into a home, for only 3% down payment. AND the mortgage insurance is STUPID low. And the Rates are STUPID low on these as well.
They did enhance it a little:
-1 borrower must be a 1st time home buyer (i.e. can’t own a home in last 3 years)
-Borrower have to take Online Class.
-Debt to income is restricted to 45% (Still way high)
AND there is Down Payment assistance available, so technically a borrower can get 100% financing, WOW!!!
Lenders loosening
Most of my lenders will now allow a FHA borrower down to 600 FICO score, and are overlooking some collections!!!
I have 1 lender that will do FHA down to 530!
Conventional financing is allowing up to 50% DTI again.
Subprime is back!!! Lender will do 1 day out of foreclosure or BK or short sale!
(of course need 30% down, but still!!!)
Time to call up those past clients that got denied and work their files again!!!
Appraisal going up.
It seems that for some reason Idaho has some of the lowest appraisal costs in the US. I am hearing that is about to change and more and more Appraisal Management companies are realizing this and are increasing prices. Appraisal in Montana are running $575 to $600, in Washington they are tipping at $600-$650.
So watch out for these increases. I haven’t’ seen any price increases on my side, but they might be coming!
FHA flipping rule
Don’t forget the FHA flipping rule waiver expires 12/31/2014. Now if the borrower is purchasing a home, and the seller has NOT been on the title for atleast 91 days, it CAN NOT go FHA.
91 to 120 days will require a 2nd appraisal AT THE SELLERS expense.
120 to 180 days, MAY require a 2nd appraisal AT THE SELLER expense.
Lead Generator
Time to go through you 2014 file and pull out all HUD-1 for all sales you did this year. Get a nice letter; insert copy of the HUD-1 into the envelope and say:
“Here is a copy of your HUD-1 for your Tax Professional, so don’t forget to give it to them. Thank you again for allowing me to help you with your home, and if there is any other friends or family members I can help, please give them my card.”