Bulls & Blogs

Fannie/Freddie to charge more for high credit scores

Residential Mortgage Comments Off

Apr 232015

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Fannie Mae and Freddie Mac charge fees when you get a mortgage based on the loan characteristics, such as your credit score and the size of your down payment. You usually don’t see these fees because they’re built into your interest rate. However, in some cases, the fees can push up your rate as much as half a point.

Fannie and Freddie’s regulator is directing them to change these fees. For all borrowers, gone is the “adverse market” fee instituted to recapitalize Fannie and Freddie after the financial crisis. For a $200k loan, that will save you $500. They’re increasing fees slightly for rental property and cash-out loans based on the higher perceived risk. They also are increasing the fee for borrowers who use a second-lien to avoid mortgage insurance for the same reason. The changes add $250 and $750, respectively, for a $200k loan.

The higher fees may make sense for these loans because they are considered risker. What doesn’t make sense is the fee increase for borrowers with high credit scores or who make larger down payments. The regulator also failed to preserve the adverse market fee for East Coast states that have ridiculously high foreclosure costs as it had previously indicated it would do. Both of these changes make me wonder whether politics hasn’t trumped economics as both seem disassociated from market realities.

The changes take effect Sep 1st.

Some relief on disputed accounts

Loan Guidelines Comments Off

Apr 022015

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

It’s all too common that I review a borrower’s credit report and find an account labeled “in dispute.” Sometimes the borrower knows about it. Too often the dispute is old news the borrower no longer remembers. The borrower may have placed the dispute herself, or it may have arisen out an inquiry the borrower made to the creditor. Regardless of the source, disputed accounts can be a pain because lenders often require the borrower to un-dispute the account before she can close a mortgage. This can take significant time on the phone with the credit bureaus and/or creditors.

But Fannie Mae is easing this restriction just a bit. Starting this month, the borrower will only have to address accounts that have a delinquency (such as a late payment or collection) within the last two years. It will ignore all other disputed accounts. In addition, it will ignore all disputed medical accounts regardless of the age of any delinquency, but note that the credit bureau must have coded the account as a medical debt. An incorrectly coded medical collection still may cause you fits.

Qualifying for a mortgage with student loans

Loan Guidelines, Residential Mortgage Comments Off

Feb 122015

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

If you have student loans, qualifying for a mortgage just got easier. Fannie Mae and USDA both have updated loan guidelines to reduce the loan payments that we must count when qualifying you.

For loans in deferment, the new guidelines cut the percentage of the loan balance we must use when calculating your total monthly debt from 2% to 1%. This is a big deal because it reduces the impact of student loan debt by 50%. Further, if the actual payment is less than the 1% calculation, the guidelines state that we can use that lower payment, but only if it fully amortizes the loan.

Unfortunately, if the lower payment is due to an income-based or graduated repayment plan, we have to use the 1% fixed amount. Under these payment plans, the monthly payment may rise, which means the current payment may not provide an accurate estimate of the loan’s impact on your finances.

While USDA already has implemented the new guidelines, the changes won’t apply to conventional loans until 4/1.

Your 2015 loan limits are…

Loan Guidelines, Residential Mortgage Comments Off

Jan 222015

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Every year, Fannie Mae and Freddie Mac release loan limits – the maximum amount you can finance with a conventional loan. FHA does the same for FHA loans. While the conventional loan limit didn’t change – $417,000 for a single-family home – FHA limits did change, mostly for the better.

In 3 of the 4 major TX metros, the loan limit increased by an average 9%. FHA sets an area’s loan limit based on 115% of the area’s median home price with a minimum loan limit of $271,050.

Austin’s limit rose by more than $25k to $331,200. Houston’s limit rose by $31k to $326,600, and the Dallas/Ft. Worth limit rose by $23k to $310,500. San Antonio’s loan limit remained $316,250. Remember that these limits apply to the entire metro area around these cities.

Click here for a link to the 2015 FHA loan limits.

Fannie Mae housing survey shows improving sentiment

Real Estate Market Comments Off

Oct 162014

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

The results of the Sep Fannie Mae housing survey turned positive after two down months. The results seem to track the general improvement in consumer confidence noted in other surveys at the end of the summer.

The share of respondents who think it’s a good time to buy a home ticked up 4 points to 68%, and the share who thinks it’s a good time to sell ticked up 2 points to 66%. An improved 66% percent said they would buy if they were going to move as more (55%) also expect rents to rise over the next year.

Folks finally seem to have clued into falling mortgage rates as the same percentage (45%) think rates will stay steady as think they will rise. Only 5% think rates will fall.

One disconcerting result was that despite improving sentiment about the overall economy, fewer respondents see their personal financial situation improving. This tracks rather well with economic reports that show very little growth in personal incomes.

You can find a link to the survey results at the end of my blog.

http://www.fanniemae.com/portal/research-and-analysis/housing-survey.html

Looking for nuggets in latest Fannie housing survey

Real Estate Market Comments Off

Sep 122014

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Fannie Mae’s Aug housing survey was a bit of downer. The percentage of folks who thinks now is a good time to buy a home dropped another 3 points, and the percentage who thinks now is a good time to sell dropped 5 points. This seems to correlate with industry reports of a slow summer. It also correlates with consumers’ concerns about their personal financial situation and flat income growth.

But if you get past the headlines, the survey results do contain a few positive points that may bode well for the coming year. An increasing share of respondents think rents will rise in the next year, and the expected rate of increase also rose. An increasing percentage also think it would be easy to get a home mortgage. These are people who may be poised to buy a home given an incentive. And that incentive could be rising interest rates. Fifty percent of respondents expect interest rates to fall in the coming year, yet interest rates have been rising, albeit slowly, since the start of Sep. If this trend continues, it might push a few folks off the fence while home affordability is still favorable.

You can find a link to the survey results at the end of my blog.

Fannie Mae housing survey