Rates
Greece will exit, Greece won’t exit, Greece will not affect the US economy, Greece will affect the US economy.
This week there has been so many opinions most talking heads don’t know which way is up.
We started out this week with some GREAT rate improvements, rates dropping down to the 4.00 to 4.125%, but looks like that only lasted through Wednesday, when rate worsened, and have also given back most of the improvements as of today.
This week it was all about Greece, even though China almost collapsed, yeah, I bet you didn’t see that in the news did you, will talk about that in a moment.
Greece has officially defaulted, old news. Well now it seems the EU is having 2nd thoughts about letting Greece go, seems that it would cost the EU and estimate $1 Trillion dollars (now I bet you can say that with out thinking Dr. Evil).
So over the last couple of days, Greece has put forth a new proposal and asking for $59 Billion dollars.
This will play out over the weekend, and we should see something on Sunday. Bets are that Greece and the EU will come to terms. But even if the EU bails out Greece, it just kicks the can down the road.
I floated earlier in the week, but now over the weekend I am locking. If no agreement comes around by Monday, and there is no “extensions” then EU will go into a tizzy and US stocks will tank and rates should improve.
China was on the verge of collapsing this week, until the communist stepped in. China’s stock market lost Trillions of Dollars this week. Since June, stock market has lost $3.2 Trillion in value and then the Chinese Government stepped in and “removed” 1200 stocks from the exchange, and threatened any short seller with jail time if they traded.
Just to put this into perspective, the current US debt is $18.2 Trillion. By the way you can keep track if the US debt by clicking here: http://www.usdebtclock.org/
But don’t stay too long on the site, it gets pretty depressing.
I am not going to go into any US economic data, let’s just say all was good.
VA appraisal
I have been asked 2x this week about protesting VA appraisal, with one Realtor saying that the other lender told them there is nothing anyone can do when a VA appraisal comes in lower…They are WRONG!
VA is actually one of the easiest appraisal to protest when it comes in low.
If a VA appraisal comes in low, tell the Lender that you want to initiate the Tidewater Initiative outlined in VA Circular 26-03-11. That is the legal, now for the layman’s terms.
A VA appraiser is suppose to notify the lender, and most do, that the appraisal is going to come in low, no the appraiser can not tell the lender how low.
Then the agents need to provide additional comps, I typically recommend minimum of 3, and I would do all 3 in a CMA format that MLS has.
The more the better, each comparable needs to be a SOLD comparable, and lined itemed with the subject property, i.e. adjusting for superior or inferior qualities. Then a couple paragraphs one why your comps should be taken into consideration. These need to be submitted to the VA Appraiser with in 24 hours.
The VA appraiser will then review the submitted information, if he utilizes it, he will correct the appraisal and adjust the price. If he can not use the comp, they he has to state why in the appraisal. If the Realtor submits crap, as what happened this week, the appraiser will not change anything.
Remember, once a VA appraisal is published, it will be attached to that home for 6 months!
Some suggestions:
-Submit the CMA you did for your original market analysis, i.e. how did you come to the conclusion to price the house?
-Pull new comparable, and make sure they make sense:
Don’t pull new construction if your subject is an existing home older than a couple of years.
Don’t pull cancelled, off the market.
Don’t pull a pending when the pending is actually the subject property (yep, they did that)
Don’t pull anything outside of 1 mile radius, if you go beyond 1 mile, you better REALLY justify it.
Don’t pull a Foreclosure or a run down house that makes matter worse, if you pull a comp that worsens your price, the appraiser may take it and lower the amount down further.
Some DO’s:
-Pull as many SOLDs
With in 1 mile
With in 90 days (sometimes you can go up to 6 months)
Similar in size, both GLA (gross living area and lot size)
-Take a CMA class, remember Garbage in = Garbage out.
-Analyze it, don’t just provide 3 MLS print out, with out explaining in detail why the comps you provided are superior or justify the pricing.
Over the next couple of weeks I am going to have a web site dedicated to this for you to reference to. But Loan officers should assist you in protesting appraisal that come in low.
Sub Prime Mortgage are BAAAACK!
Read an interesting article today about the return of Sub Prime mortgages and their resurgence in our industry.
Now don’t get me wrong, there is quite a bit more regulations than before, but the products are still the same.
Mortgage 1 day out of BK or Foreclosure: I have been doing these for about 6 months now, and I am only doing 30 year fix rate mortgages with no pre-payment penalty, but Yes, with a 501 FICO score and 1 day out of BK you CAN get a home, link to web site here: http://www.375loan.com/loan_products/non_prime_lending/
Interest only loans: These are starting to show up more and more, seems like there are a few national credit unions starting to do these. Frank Dodd law didn’t ban them, but borrower do need to qualify at a fully P & I payment.
Option ARMs: This is the loan where as people are given 4 options to pay each month, 30 year, 15 year, Interest only, negative amortization. Once again, not banned by Frank Dodd, but heavily regulated, the borrower has to qualify the highest payment, which would be the 15 year full P & I payment.
Are we setting us for a crash again, no, because these loans were NOT the cause of the mortgage industry crash, always keep that in mind. But these products are more heavily regulated than EVER before.
Moral of this story, there are more and more options for borrowers, even for ones fresh out of BK.
And a Lead Generator….
Visited with my Mail Man last week, handed him a business cards, and guess what, he needs to do a refinance, SWEET.
So I want everyone to go and visit their Mail Person this week, and have them a business card!