Nov 9, 2018

Mortgage application volume falls to a four-year low

As per National Mortgage News, Mortgage application activity dropped to its lowest level since December 2014 as interest rates reached an eight-year high, according to the Mortgage Bankers Association.

The MBA's Weekly Mortgage Applications Survey for the week ending Nov. 2 had a 4% decline from one week earlier as the refinance index decreased 3% over the same period. The refinance share of mortgage activity decreased to 39.1% of total applications from 39.4% the previous week.
Mortgage apps take hit
The seasonally adjusted purchase Index decreased 5% from one week earlier to the lowest level since November 2016, while the unadjusted purchase index decreased 1% compared with the previous week and was 0.2% lower than the same week one year ago.

"Rates increased slightly last week, as various job market indicators showed a bounce back in job gains and an acceleration in wage growth in October," Joel Kan, the MBA's associate vice president of economic and industry forecasts, said in a press release. "The survey's 30-year fixed-rate, at 5.15%, was the highest since April 2010."

"The purchase index declined to its lowest level since November 2016, but remained only slightly below the same week a year ago. It's evident that housing inventory shortages continue to impact prospective homebuyers this fall," Kan said.

Adjustable-rate loan activity increased to 7.8% from 7.6% of total applications, while the share of Federal Housing Administration-guaranteed loans decreased to 10.1% from 10.3% the week prior.

The share of applications for Veterans Affairs-guaranteed loans increased to 10.1% from 9.8% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.7% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased 4 basis points to 5.15%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate increased 3 basis points to 4.97%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 7 basis points to 5.15%. For 15-year fixed-rate mortgages the average remained unchanged at 4.55%.

The average contract interest rate for 5/1 ARMs increased 3 basis points to 4.36%.

Oct 22, 2018

How to know your loan processor is the right one for you ?

A mortgage loan processor is the link between a borrower, loan officer and the  underwriter in the context of a residential mortgage. And he or she is arguably the most important member of the team.

The National Association of Mortgage Processors says, “The primary function of the Loan Processor is to ensure the timely and accurate packaging of all loans originated by loan officers.” So it’s mostly an administrative role.

Mortgage loan processors typically:
  • Collect and collate all the information needed to approve a loan and make informed decisions concerning an application
  • Input that information into the lender’s IT systems
  • Verify information through documents you supply
  • Make third-party checks with credit bureaus, employers, accountants and so on
  • Order an appraisal of the home
  • Obtain title insurance and flood insurance (if needed)
  • Ensure the compliance of your case with regulatory requirements and internal policies
  • Order the final loan documents
  • Ensure the loan stays on track to close on time
  • Schedule appointment for closing

You can usually expect a mortgage loan processor to be involved throughout the application process: from pre-approval to closing.

Advantages of a good relationship

For a loan officer, it is of immense help to have a good relationship with a mortgage processor. The processor is the person who often has some workarounds. He/She might suggest an alternative that might get you out of a hole and make the difference between a loan that closes and one that doesn't. For instance, it can be difficult proving that your client is receiving alimony if she doesn’t deposit it separately or keep copies of the checks. And who wants to have to ask their ex for cancelled checks?

A processor may find a way around this, ordering copies of the actual deposits from your bank. So you need him on your side. The last thing you want is to be deliberately unhelpful or gratuitously rude.

In fact, building a good working relationship with her can help you. You want her to see you as a person rather than a case number each time she picks up your file. Even the most objective professionals work harder for those they like. As far as possible, it helps to respond to requests from processors in a timely manner - to show that you care about the work that he/she is doing for you.

Jul 16, 2018

Is FHA Home Loan a good option for me?

Is FHA Home Loan a good option for me?
FHA, which stands for the Federal Housing Administration, is a United States government agency which insures home loans for FHA approved lenders.
One of the best tips for buying a house is to fully understand all the financing options that are available to them.  As a buyer is trying to determine which type of mortgage is the best, they must weigh the PROs and CONs of each option.
In this article you’re going to learn what the PROs and CONs of FHA home loans are., a buyer puts themselves in a much better position to make a smart decision when it comes to their home financing.

What Are FHA Home Loans?
FHA has been helping people become homeowners since 1934.  FHA is part of the HUD, which stands for Housing and Urban Development. One of the biggest reasons why FHA home loans are popular nowadays is because they allow buyers who don’t have boatloads of money saved for a down payment to still buy a home.

How To Determine If You Qualify For FHA Home Loans
It’s critical to understand when obtaining financing for a home that there are general guidelines a lender follows, also referred to as mortgage overlays, but there is certainly flexibility depending on a buyers individual circumstances.
Below are some general mortgage overlays that lenders will use to determine a buyers eligibility for an FHA mortgage.  
  • Lenders prefer to see a minimum credit score of 620, however, FHA does allow a buyer with a 580 credit score to qualify for a home loan, subject to other requirements.
  • FHA home loans require a minimum of a 3.5% down payment.
  • Lenders prefer to see a buyer with a debt-to-income ratio of 43% or less.  In some cases, FHA allows a buyer to be manually approved with a debt-to-income ratio as high as 55%.  Buyers with debt-to-income ratios higher than 43% can be approved through the AUS (automated underwriting system).
These guidelines above are very basic.  

Peoples Processing is licenced in multiple states that conducts wholesale and correspondent business. It helps brokers with the loan processing with our experienced team and help them close it faster.

Jul 13, 2018

Mortgage application volume rebounds but refis fall to 18-year low

Mortgage applications rose due to year-over-year progress in the job market, snapping a two-week skid. It was a 2.5% increase from the week prior, according to the Mortgage Bankers Association.
The purchase application volume drove the overall numbers. The seasonally adjusted purchase index increased by 7% from one week earlier, however, it decreased by 15% on an unadjusted basis. It stands at 8% higher year-over-year.
Despite the total applications rising, the refinance index decreased 4% for the week ending July 6 from the previous week. That is the lowest level of activity since December 2000. The refinance share of application activity went to 34.8% from 37.2%, the lowest since August 2008.
"The strong job market continues to bolster demand for homes, with purchase volume up 8% year-over-year, even as the lack of inventory still is holding back the pace of sales. Nevertheless, the mix of business continues to move towards loans for home purchase," said MBA Chief Economist Mike Fratantoni.
Mortgage application volume rebounds
Employers added 213,000 jobs in June, while the unemployment rate also increased to 4% as more unemployed people resumed looking for jobs. If hiring increases continue, that could translate to more house hunters in the real estate market.
Adjustable-rate loan activity decreased to 6.3% from 6.7% of total applications.
The share of applications for Federal Housing Administration-guaranteed loans decreased to 10% from 10.2%, Veterans Affairs-guaranteed loans jumped to 11.3% from 10.7% and U.S. Department of Agriculture/Rural Development remained unchanged at 0.8%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.76% from 4.79%. The average for 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100) also dropped, going to 4.68% from 4.71%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.80% from 4.78%. The average for 15-year fixed-rate mortgages dipped to 4.18% from 4.22%.

The average contract interest rate for 5/1 ARMs reached its historical high point of 4.13%, gaining 10 basis points from last week. The MBA began tracking 5/1 ARMs interest rates in January 2011.

Jul 5, 2018

VA Program Guidelines Update

The President of the United States signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act. The Act prohibits Ginnie Mae from guaranteeing securities issued on or after May 24, 2018, if such securities are backed by a refinance loan that is guaranteed under the United States Department of Veteran Affairs benefit program and that does not meet the condition provided in the Act. 
To qualify for inclusion in a Ginnie Mae guaranteed MBS, the Act requires VA refinance loans to have a note date that is on or after, the later of:
1. the date that is 210 days after the date on which the first monthly payment is made on the mortgage being refinanced, or
2. the date on which six (6) full monthly payments have been made on the mortgage being refinanced. 
Effective immediately, VA refinance transactions must meet the revised seasoning requirements in order to be eligible for funding/purchase. Plaza's VA Program Guidelines have been updated to align with Ginnie Mae requirements. 
Additionally, for applications taken on or after May 25, 2018 VA IRRRLs must provide a net tangible benefit as described in VA Circular 26-18-13 and all fees and incurred costs referenced in the circular, shall be recouped by the veteran within 36 months after the loan closes. The recoupment calculation is the result of lower monthly payments of the refinanced loan.