Rates
As expected this week, and probably until next Wednesday, we will be in a pretty flat mode as investors wait to see if the Federal Reserve will increase their Fed Fund rate from Zero, which we have been there since 2009 to .25.
The speculation by the talking heads is all over the place, so basically no one really knows.
The announcement will come around 12:15 PM our time on Wednesday and we expect the markets to be extremely volatile after the announcement, not a good day to lock a rate.
Like I indicated above, we have been stuck in a pretty narrow trading pattern both in the Stocks and the Bonds, with very little news causing the markets to go one way or another.
So what will happen if the Fed Raises rates, well the market has been anticipating this for over 9+ months now, and if they do raise rates then almost everyone will let out a sigh of relief that we don’t have to worry about when the Fed will start raising. It will of begun. But now the questions will be swirling on how much and how fast.
Most talking heads feel that the Fed will rise by .25 and then let the economy sit on that for about 6 months, which puts us in March.
If the Fed does not raise rates, it might actually cause some concern in the markets that the Fed isn’t confident with the US economy, which would then potentially caused Stocks to sell off.
I suspect if the Fed does start raising rates, we will see Mortgage rates start to climb, probably into the Mid 4’s by end of the year…but keep in mind 6% is coming.
22 Days and Counting!
Yep, the new TRID disclosures are coming, whether you like them or not, on October 3rd. I have 2 more classes scheduled on this training, and then I probably won’t do anymore, because by that time, it will be too late.
Some items to keep in mind:
- -To Start, I would write 45 day escrows. Will we get back to 30 days, maybe, but for now, keep it at 45 days.
- -Make sure you, as a buyers agent, get a copy of the Loan Estimator and help your clients understand it. And by all means, absolutely get a copy of the Closing Disclosures and consult with your borrowers. Remember they have 3 days to review that CD and to “Google” stuff.
- -Make sure your borrowers are getting their appraisal a full 3 business days BEFORE the CD is disclosed!
- -DO NOT CHANGE ANYTHING on the purchase agreement once the CD has been issued, if you do, this could cause the CD to be re-issued or worse the file go back into underwriting.
- -Communication is KEY, if you don’t have good communication between the lender-realtor-borrowers, you are going to be doomed. (FYI I happen to know a pretty good lender)
- -Electronic Signing of documents is KEY to ensuring that the transaction is kept on track, make sure you know and your borrowers know how to eSign a document.
Flyer from MBA also attached to email.
Sub prime & Hard Money loans
Yep, as I have said before, sub prime and hard money loans are defiantly making a come back, we are seeing more and more lenders releasing loans that will:
- -Allow for income based on 24 months of bank statement deposits to be counted.
- -1 day out of Bankruptcy, both Chapter 7 & 13
- -1 day out of foreclosures or short sale.
- -Interest Only loans
Now before you say “here we go again!”, the rules are definitely stricter on verifying income and assets, no more will the WalMart Greeter be able to afford a $400,000 loan on stated income.
Check out link here for full details: http://www.375loan.com/loan_products/non_prime_lending/
Run down of changes:
-9/14/2015: All new guidelines for ALL FHA loans.
-9/16/2015: Federal Reserve announcement on Rates. 12:15 PM MST
-10/1/2015: Rural Development guideline changes.
-10/1/2015: Rural Development fees go up.
-10/3/2015: New TRID disclosures go into effect.
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