Conflict in Ukraine and Middle East

Geopolitical events were the primary influence on mortgage rates again this week, while the economic data had little impact. After a quiet weekend, investors were willing to take on a little more risk early in the week. Shocking news on two fronts caused an abrupt reversal on Thursday, however, and mortgage rates ended the week just slightly higher.

When a conflict breaks out which could affect global markets, investors generally respond with a “flight to safety”. Uncertainty created by the threat of escalation causes investors to reduce the level of risk in their portfolios. This typically involves shifting from stocks to relatively safer assets such as gold and bonds, including mortgage-backed securities (MBS).

Heading into last weekend, investors were concerned about the possibility of an escalation in the conflict between Israel and Gaza, so they shifted to safer assets. When there was little change in the situation early this week, investors unwound these positions, pushing rates higher. Then on Thursday, Israel announced a ground offensive in Gaza and a Malaysian passenger plane was shot down in Ukraine. These events caused investors to quickly return to safer assets, offsetting much of the earlier rise in rates.

In the US, there was mixed news from the housing sector. The National Association of Home Builders (NAHB) Housing Market Index revealed that builder confidence jumped sharply in July to the highest level since January. Less positive, the Housing Starts data released this week, which covers the month of June, showed a decline of 9% from May. This data can be quite volatile from month to month, though.

What is HARP?

Home Affordable Refinance Program 

You may be eligible for HARP if you meet all of the following criteria:

  • The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  • The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  • The current loan-to-value (LTV) ratio must be greater than 80%.
  • The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.

 

 

What is HAMP?

Home Affordable Modification Program

Effective June 1, 2012, the Obama Administration expanded the population of homeowners that may be eligible for the Home Affordable Modification Program to include:

  • Homeowners who are applying for a modification on a home that is not their primary residence, but the property is currently rented or the homeowner intends to rent it.
  • Homeowners who previously did not qualify for HAMP because their debt-to-income ratio was 31% or lower.
  • Homeowners who previously received a HAMP trial period plan, but defaulted in their trial payments.
  • Homeowners who previously received a HAMP permanent modification, but defaulted in their payments, therefore losing good standing.

 

 

 

 

 

 

Melinda Movick
Mortgage Advisor
Frontier Mortgage
2012 and 2013 Five Star Professional Service Award
Providing Personalized Service to Every Client
314-960-9084
Fax: 1-888-545-4808
NMLS ID: 253071
MO ID : 340-MLO

The Back to Work FHA Loan Program

FHA recognizes hardships faced by these borrowers, and realized that their credit histories may not fully reflect their true ability to repay a mortgage.

The Back to Work FHA Loan Program is an option for some borrowers that have experienced an economic hardship.

FHA is allowing for the consideration of borrowers who have experienced an Economic Event and can document:

  • Certain credit impairments were the direct result of a loss of employment or significant loss of household income beyond borrower’s control.
  • The borrower has demonstrated full recovery from the event
  • The borrower has completed Housing Counseling completed within at least 30 days prior to application but no more than 6 months prior to application date.

Economic Event is any occurrence beyond borrower’s control that results in loss of employment/ income which causes a reduction in the borrower’s household income of 20% or more for a period of at least 6 months.

Recovery from Economic Event is the re-establishment of satisfactory credit (defined in detail as listed in FHA MEMO 2-13-26, page 5) for a minimum of 12 months. 

Satisfactory credit requirements include, but not limited to, no mortgage late payments, installment, revolving account or major derogatory credit issues within the last 12 months.  If a mortgage term was modified, as long as borrower has made timely payments according to modification agreement this may be acceptable.

  • Borrower exhibited satisfactory credit prior to the Economic Onset
  • Borrower’s derogatory credit occurred after the Economic Event
  • Borrower re-established credit for last 12 months

 

v  Collection/Judgments need to be verified as result of Economic Event

v  Foreclosure/Short Sale/Bankruptcy:  A minimum of 12 months must have passed since the date of Foreclosure/Short Sale/Bankruptcy  and this must be documented it was the result of Economic Event.

(Chapter 13 Bankruptcy requires a letter from the courts to proceed with a mortgage loan)

Satisfactory Housing Counseling – Borrower must receive homeownership counseling by a HUD approved housing counseling agency.  Housing Counseling may be in person, via phone, via internet or other approved methods by HUD.  List of agencies can be found at http://www.hud.gov.

*Please note: Each lender/bank may have specific overlays. This is intended for educational information only. Additional documentation and guidelines apply.

Melinda Movick
Mortgage Advisor
Frontier Mortgage
2012 and 2013 Five Star Professional Service Award
Providing Personalized Service to Every Client
314-960-9084
Fax: 1-888-545-4808
NMLS ID: 253071
MO ID : 340-MLO

Sorting documents and decluttering your home is a liberating spring experience.

Spring is here, our favorite season. Homebuyers and sellers emerge to begin different lives in their new homes and neighborhoods. Especially for sellers, paper purging is an excellent way to begin de-cluttering your home and getting it ready to show.

What is expendable and what should you keep? According to the AAA Midwest Traveler, you can shred utility bills, phone bills and credit card statements after you pay them. Pay stubs, bank statements and medical records can go away in 12 months. Exceptions could be if you have an ongoing medical problem or a working through a claim or reimbursement.

Further down the road, keep tax records, real estate transaction records, and documents related to home improvements for six years.

For your archives, keep insurance records, IRA contribution documents, until you withdraw the money, and active warranty documents.

Other paper you can throw away include outdated warranties for items you no longer have, outdated instruction manuals, which, considering the speed of technology, could be outdated in three months; old annual reports and investment newsletters, cancelled insurance policies and outdated wills and trusts, but only if you have a new will created.

Before you throw documents away, make sure your identity is unrecognizable. This includes your name, social security number, birthdate, account numbers and passwords. The best way to do this is to use a shredder to thoroughly destroy documents.

After you tackled this project you’ll be ready to begin decluttering your home to show at its best advantage. Believe us, it’s liberating!

Appreciation Campaign

Everyone likes to feel appreciated.  We have a tendency to take our sphere of influence, clients and ambassadors for granted.  It can take 20 minutes per week to put together an “Appreciation Campaign” for a specific group of individuals that have the ability to make a difference in your business.  A simple lunch may take a couple hours out of your day, and yet it is a great opportunity to get quality time and discuss how you may help each other grow your businesses.

Your close sphere of influence – These are the individuals you come into contact on a regular basis that can be a referral source for you.  Take the time to reach out to them for a coffee, lunch or after work appetizers.  This is the perfect opportunity show this person they are appreciated and worth your time.  During this time you will want to make sure you show interest in them, their family’s wellbeing, how you can help provide referrals and/or referral sources to them.  This lunch is not about you and your business.

Your clients – Instead of sending out a newsletter the client may or may not read, send your clients something of benefit to them.  Ask a local restaurant, car wash, or movie theatre to provide you with a discount and share this discount in  an emailed coupon.

Your Ambassadors – These individuals are your cheerleaders.  Even though you may not have frequent contact with this person, he/she will always refer you with gloating accolades.  The ambassadors are typically influential, trustworthy and therefore when they share that you are their “go to person”,  you get the business.  Your act of appreciation to them will be received with much gratitude and a lasting positive impression.  Typically ambassadors tend to be busy.  A “Thank you” card stating they have helped your business grow and that you are incredibly thankful is just the type of recognition that will make their day.

Appreciation can be simple, inexpensive and does not have to require a lot of time.  However, the long term benefits and stronger business relationships can have a lasting impact on your business.

 

 

Melinda Movick
Mortgage Advisor
Frontier Mortgage
2012 and 2013 Five Star Professional Service Award
Providing Personalized Service to Every Client
314-960-9084
Fax: 1-888-545-4808
www.mortgageadvisoronline.com
NMLS ID: 253071
MO ID : 340-MLO