Forclosure projections and Risk Based Pricing

New tools for assessing mortgage risk. With foreclosures projected to reach 2 million nationwide by the end of next year, bankers are rethinking how they set mortgage rates. Eventually, mortgage pricing may come to resemble pricing for, say, homeowners insurance, which takes into account dozens of factors. Lenders "want to be able to assess the risk, practically down to the biological level, that you won't pay your mortgage," says Keith Gumbinger, vice president of HSH Associates, which tracks the home-lending market.

Housing data: no secrets left. With more innovative real estate Web sites popping up, everyone now knows how much everyone else's house is worth, and consumers will continue to have unprecedented access to housing information that was once found only in multiple listing services. Source: Money

When Higher Rates Are Good News.

When are higher rates good news? The fact that rates on fixed mortgages have moved up in the past few weeks may actually be. Why? Because the rates on Treasuries have moved up further. This means that the spreads between mortgages and other rates are decreasing and could mean that the secondary markets are gaining confidence in mortgages again. Remember, part of the reason that rates on many mortgages have increased in spite of lower rates everywhere else is that the default rates on mortgages were so high. This accounted for the fact that adjustable rate mortgages and jumbo mortgages rose dramatically over the past year despite generally lower rates. Source: Origination Pro - Dave Hershman

CalHFA Changes and Other Options for 100% Financing

Here are the changes from CalHFA

Hi All,

Be careful on CalHFA right now!!

*Note the changes below.

1) Seller credit max is 3% - even if you are doing an FHA loan
2) Nehemiah can no longer be used with Cal HFA products
3) 45.00% max DTI on manual underwriting and 55.00% on Automated
approvals
4) 3 years from BK discharge - regardless of what kind of first
mortgage you have
5) Mid low FICO of all borrowers must be 620 for 95% LTV or less or 680
for 95.01% LTV or more (Note this is LTV, not CLTV)

Please make sure you are relaying this info to your clients...

Another option for 100% financing is FHA loans with Nehemiah gifts through seller contributions (up to 6%)!

For Further information please contact our chief FHA and Nehemiah Specialist Joe Littell at joe.littell@partnersnet.com for further information.