Rural Development Rule change
Last Friday, 1/20, Rural Development came out and added another fee to it unallowable fee list, this is the Realtor Administration or Transaction Coordinator fee. Seller’s can pay for this fee, but Realtors are not allowed to charge it to the borrower.
With RD announcing this, I am pretty sure that VA and FHA will follow suite very shortly.
And the IRS is also on the watch out for this as well, because Realtors are not 1099 this fee to the TC. IRS rules require that you 1099 anything over $600, check with your CPA for full details.
What would happen if the fee slipped through the cracks…can we say lots and lots of fines, ouch.
FHA mortgage insurance
Well the Obama administration gave borrowers a little good news around the 1st of the year, by reducing FHA monthly fee from .85 to .60, thus saving a homeowner around $500 per year on a $200,000 mortgage.
Well on the 1st day of the Trump administration, executive action removed that rate reductions. So really nothing happen, we just got a little excited for about 10 days.
But, in my opinion, I think that the Trump Administration will re-evaluate FHA Funds, and I am thinking that they will reduce the FHA even more, maybe take it down to the .55% AND reduce the upfront MI, which is currently sitting at 1.75%.
Wells Fargo, in trouble again
At some point in time, you do have to start feeling sorry for the employees of Wells Fargo, it seems each week, they are in the news. This week, it seems that from May of 2005 until June of 2010, Wells overcharged mortgage fees.
So why am I telling you this, well this can become a lead generator, go back though all of your HUD-1’s and see which clients closed a loan with Wells Fargo during that time. Then drop them an email or give them a phone call, and have them register with Class Action suit, link in in the article below, and don’t forget to ask them if they are looking for a new home??
Link to article here.
Mortgage Rates
Well after a couple of weeks of stable rates, maybe even slight improvements, we are seeing the Great Rate Correction to continue. Economic numbers are coming in, and they are all looking AWESOME for the US economy. And today the Dow hit 20,000 and looks to close over it for the 1st time ever. And with this, mortgage rates are going up, AGAIN. I think we are still on track for high 4’s by March and 6’s by end of the year.
Some Economic numbers that are of interest:
- Initial Jobless Claims 234,000 vs est of 254,000, VERY LOW.
- December Retail Sales 0.6% vs est. of 0.7%, small miss, still a very high number.
- Inflation 0.3% vs est. of 0.3%, watch this number, if we see inflation start to go higher than expected, the Fed will increase rates even faster to keep inflation lower.
- New Housing Starts 1.210M vs est. of 1.225M, blame it on the weather.
- Building Permits 1.226M vs Est of 1.200M, gearing up for spring
- Existing Home Sales 5.49M vs est of 5.52M. this is just a stupid number on # of home, even though it is a miss, that number is HUGE.
Things to watch out for when looking at the news, Inflation, if we start to see inflation rise above the threshold of 3.0%, currently we are at 2.20%, the Fed is going to step in and raise rates even faster. This will totally tank rate, because mortgage rates (bonds) HATE inflation, and if we see run-a-way inflation, mortgage rates are going to skyrocket…think Carter administration, when rates were in the 18’s.