Happy New Year

The new year brings with it new hopes, new joys, and new opportunities. Thank you for a great 2008 and I wish you all the best for 2009. You will be in my thoughts throughout the year.

Happy New Year from Darrell Walters and Integrity Mortgage Funding.

http://www.integritymtgonline.com/

dwalters@integritymtgonline.com

Office: 678.648.5626

Are Loan Modifications Working?

As the economy continues to stall, mortgage lenders are increasing their efforts to modify loans to homeowners in default. Nearly 200,000 loans were modified this year by lenders such as Bank of America Corp., Citigroup Inc., and J.P Morgan Chase & Co., but recent data suggests that more needs to be done to assist struggling homeowners.

Over half of homeowners that had a loan modification fell behind on their mortgage payments within six months of their modification. Also of note, 41% of homeowners were 60 days or late or greater after eight months of modification.

According to John C. Dugan, Comptroller of the Currency, “the numbers are larger than we thought they’d be.”

The government is now, more than ever, trying to work with lenders to produce effective modifications that reduce the borrowers monthly payments.

One interesting aspect that could tighten lender guidelines is the fact that the FDIC has found that homeowners default a great amount less when the new mortgage payment is less than 38 percent of monthly income.

With tightening guidelines and low interest rates now might be the time to consider making that new home purchase.

Source:
The Wall Street Journal
Easing Mortgages Isn't a Panacea
December 9, 2008

Tips to Help Your Home Sell Faster

When selling a home in our current market, the most important tip to remember is to have the right selling price. The Wall Street Journal also has a few additional pricing tips and techniques to help sell a home quickly.

The tips included:

1. Looking Slim: $199,999 seems far less expensive than $200,000
2. Sending Messages: Precise numbers indicate a bargain; Round numbers convey quality
3. Cutting Prices: In dropping the price, make the math easy for buyers to calculate the savings

These tips will help improve your odds in finding a buyer and if you need a referral for a successful Realtor in your area, email dwalters@integritymtgonline.com. I would be glad to provide one for you.

Merry Christmas!

May Peace be your gift at Christmas and your blessing all through the year.

Merry Christmas from Darrell Walters and Integrity Mortgage Funding.


http://www.integritymtgonline.com/
dwalters@integritymtgonline.com
Office: 678.648.5626

Receive An Extra Tax Deduction In 2008

Most, but not every, home owner can increase their 2008 tax deductions with an extra mortgage payment made during the 2008 calendar year.

In order to receive the additional tax deduction the home owner would need to make the January 2009 payment before December 31, 2008. The reason this is important is because interest on the mortgage is paid in arrears, meaning that your January 1, 2009 payment includes interest accumulated from December.

For more information consult your tax professional as not all homebuyers qualify for these tax deductions. If you do not have a tax professional, contact me and I will gladly provided a referral.

How Cheap Gas Helps the Real Estate Market

The price for gas has fallen to a national average of $1.67. This decline at the pump is less than half of what gas cost in July.

As prices have declined nationally, what does that do for real estate? People tend to spend more when they view themselves as being worth more, also know as the Wealth Effect. This increase in wealth should lead to higher levels of consumer spending, which is why consumer confidence rose in November.

This is important to the real estate market because as people view themselves as wealthier and gain more confidence in the economy, major purchasing such as homes will increase. Also helping the market are mortgage rates at 3 year lows.

Image source: GasBuddy.com

Understanding the Federal Reserve

On December 16th, The Federal Open Market Committee voted to lower the Fed Funds Rate to the lowest level in history. The rate is now set at a range of between 0 and ¼ percent.

According to the press release, the FOMC acknowledged that labor markets have declined, consumer spending is down, and business investment has fallen.

With an overall view, economic activity has weakened further, but the Fed intends to use the rate cut and “all available tools” including the kitchen sink to promote economic growth. This could include the acquisition of billions of additional purchases in mortgage-backed securities.

Included in the report was the opinion that inflation was a diminishing threat. However, that view could change dramatically when the economy improves. Once that happens it will be bad news for mortgage rates.

Source:
The Wall Street Journal
Parsing the Fed Statement
December 16, 2008

Bankrate.com Mortgage Trend Index

The December 18th release of the Bankrate.com Mortgage Trend Index is available with the experts saying that we should expect rates to fall even more.

The predictions for the week are:

23% of the experts believe that rates will increase
68% of the experts believe that rates will decrease
8% of the experts believe that rates will remain unchanged

Greg McBride, senior financial analyst, Bankrate.com states, “The Fed voiced their intention to get mortgage rates down by purchasing mortgage-backed debt, and they'll do what they need in order to make it happen.” With the latest indication from the Federal Reserve that they will try anything necessary to prevent our recession from turning into a depression, rates should drop slightly but overall remain stable.

If you’re interested in refinancing or purchasing now is the time to start the process. Once we reach a rate that you are satisfied with, we will lock it accordingly. Also you can email me for free up-to-date information on mortgage rates and remember that this survey is for conforming rates only and does not apply to VA, FHA, or jumbo loans.

Source: Bankrate.com

Do You Want to Get Paid from the Electric Company?

With home energy costs expected to soar this winter, check out this 30-second youtube video showing a home's electric meter running backwards.

This homeowner decided to install solar panels.

The home is producing more energy with the solar panels than it is using so the meter runs backwards. It may be a cost effective option to look into now that “going green” is becoming cheaper. It still costs money upfront, but how often to you get to see your meter running backwards?

Would you like to eliminate your electric bill? It’s worth watching again.

It's 3 O'Clock Somewhere...

The Wall Street Journal recently ran an article about how 3:00 pm is affecting mortgage rate shoppers.

The article talks about how investors, in a need to raise cash, sell off anything that they can liquidate. With a normal market, other investors would buy up these assets immediately, thus keeping the stock market in check. In the current economic climate, buyers aren’t purchasing immediately. They are waiting until the very last hour when investors have sold everything they can, then the buying begins.

This explains why mortgage rate repricing has been on the rise in the afternoon. The market becomes so overloaded with supply that it comes to a tipping point, and demand rises through the roof.

Therefore, it may be wise to go ahead and lock your rate at 2:59 pm if you are happy with it. The last thing you want is to hear that your rate isn’t available and your payment would be higher.

Source: The Wall Street Journal Online
The Street's New Witching Hour: It's 3 p.m. as Stock Traders Jockey
December 11, 2008

What is PITI?

Homeowners make a monthly payment for their property each month. That payment includes four parts:

1. Principal on a mortgage
2. Interest on a mortgage
3. Taxes on the real estate owned
4. Insurance for the real estate owned

These four parts are known together by the acronym PITI. Typically when someone is referring to their monthly mortgage payment, they are referring to PITI even if their payment doesn’t include all the elements.

For example, a condo owner would not pay homeowner’s insurance, but a monthly association fee. Also, a homeowner may have an interest only home loan and would not pay principal each month.

Even if your PITI doesn’t include all the elements listed above, it is still the place to start when looking at purchasing a new home. PITI is the monthly cost, and by knowing what you can spend each month for your new home, it’s easier to find a property that meets your budget.

Knowing how much you can pay monthly is better than asking "how much home can I afford." When you do that, your response will only include the principal (P) and the interest (I). As an informed home buyer, you need to know all four.

Source: Investopedia

Bankrate.com Mortgage Trend Index

The latest Bankrate.com Mortgage Trend Index is available with the experts predicting that rates are unlikely to rise. They'll fall more or stay about the same.

The predictions for the week are:

• 6% of the experts believe that rates will increase
• 56% of the experts believe that rates will decrease
• 38% of the experts believe that rates will remain unchanged

With the numerous bailouts from Washington our budget deficit is now at an all time high. This should be bad news for the bond market as the government prints more money, they devalue the currency that is in circulation. Inflation in its basic form, all the while causing bonds to be worth less. What is happening, however, is that bonds are being purchased causing rates to fluctuate.

As Dan Dowling, President of United Mortgage Capital Corp., states, “It's coming, the question is when. Timelines for government action have been "flexible," to say the least. Bond traders have certainly factored this into to recent purchases of TBA pools.”

Email me for free up-to-date information on mortgage rate news and remember that this survey is for conforming rates only.

Source: Bankrate.com

Protecting Yourself From Becoming A "Trigger Lead"

Here is a story from the CBS News for anyone who's recently applied for credit.

Credit repositories such as Trans Union, Experian, or Equifax have the ability to sell your personal information when you are trying to purchase or refinance a home. They sell this information to other lenders that want your business.

This information, known as trigger leads, works by having a mortgage applicant who had his credit checked by his mortgage consultant, then sold by the credit bureaus to other lenders throughout the country.

These leads are viewed by many as a great marketing source, because these “trigger leads” mark a person who is purchasing or refinancing now.

As the family in the CBS video learned, even when you’re on the Do Not Call Registry, the phone won’t stop ringing.

If you are interested in opting out of becoming a trigger lead visit http://www.optoutprescreen.com/. This site is sponsored by the three major credit bureaus that sell the leads. This opt out option is good for five years, there is also a form available online for you to mail to opt out permanently.

Image source: CBS News Video

What's the Story Behind 4.5 Percent Mortgage Rates?

Lately I have been hearing a lot of comments and questions regarding the potential of 4.5 percent mortgage rates.

The news clip above from NBC Today is just one example of the numerous publications reporting on the possibility of a Treasury sponsored rate drop to four and a half percent interest rate. The story as it has been reported was a “leak” of a potential action from the government, but the story is purely speculation.

Without any factual information provided by the leaked story let’s look at a few keys to the mortgage market:

1. Mortgage rates are based on supply and demand of mortgage backed securities. They are not based on the Treasury.
2. Government involvement with the mortgage market does not ensure lower rates. As an indication, mortgage rates are up a half percent since last week.

The one thing that we do know is that mortgage rates, although volatile, are very low in comparison to the past few years.

So if you believe that your rate is too high or that you could benefit from a refinance, give me a call or email. I'll recommend the best option for you as rates are frequently changing. Besides, if after your closing rates reach 4.5 percent, we will refinance to the lower rate.

What’s the Difference Between PMI and Homeowners Insurance

Private mortgage insurance or PMI is insurance for the mortgage lender in case the homeowner or mortgagor is not able to repay the loan. PMI allows the lender to recover its losses after a foreclosure and sale of the reposed home.

There are two types of PMI, lender paid and borrower paid. The common version, borrower paid, is paid by the borrower either up front, quarterly, or monthly. PMI is no longer required once the loan balance is 80% of the property’s value.

Lender paid PMI is paid through the interest rate charged to the homeowner. The lender charges a higher rate and uses the additional proceeds to purchase the mortgage insurance policy.

Another type of insurance that is needed for a home is homeowner's insurance, HOI, or hazard insurance. This type of insurance protects the lender and potentially the home owner in the event of a catastrophe.

For example, if a home is destroyed in a fire:

• The HOI will pay the lender the amount owed on the mortgage.
• The HOI with personal property insurance will pay for the personal possessions of the home owner destroyed in the fire.
• The HOI with liability insurance will protect the homeowner from third-party claims related to the fire

Homeowner's insurance commonly only covers the lender’s responsibility and it's a good idea to have additional coverage for personal property and for liability. Check your homeowner’s policy today to verify or call 678.648.5626 for a recommendation on a professional insurance agent today.

Source: Private Mortgage Insurance

Wikipedia

December 1, 2008

Bankrate.com Mortgage Trend Index

The latest release of the Bankrate.com Mortgage Trend Index has been released and the experts are saying that you’re going down rates!

The analysts predict that rates will:

• 7% of panelists forecast that rates will increase
• 62% of panelists forecast that rates will decrease
• 31% of panelists forecast that rates will remain unchanged

Jim Sahnger of Palm Beach Financial Network, states, “The only thing consistent in recent months is volatility and unexpected events. Based on historical perspective, when rates hit the recent lows, they move sharply higher in coming weeks. However, poor economic news should keep a lid on rates going too much higher. If you are offered a rate that works for you, lock it! Rates have swung as much as a half point in a few hours. The only certainty in today's rates is the one you are offered at the time you can lock it.”

As a reminder, this conforming mortgage rate survey does not include other types of loans, such as VA mortgages or jumbo mortgages. For information regarding the latest rate trends, email dwalters@integritymtgonline.com.

Source: Bankrate.com

Selling Your Home in 30 Days...

Real estate maven Barbara Corcoran talks on NBC's Today Show about how to prepare your home for a sale.

Here are a few of her highlights from the 5 minute video:

1. Go online and shop for your own home first.
2. Clean out the clutter.
3. Keep your home immaculately clean.

Barbara Corcoran also offers pricing strategies to help get your home sold faster.

The entire interview is avaliable online at MSNBC.

Is a Stranger Using Your Credit?

How accurate is your credit report?

A study from 2004 says that nearly 80% of credit reports contain at least one error. In addition, 25% of all credit reports contain a serious error that will deny or limit your access to credit.
Some of the errors were:

• 54% of the credit reports in the study had personal information that was wrong. This includes misspelled names, outdated payment information, incorrect social security numbers, and wrong addresses.


• 30% of the credit report errors were related to closed accounts that appeared to be open.


• 22% of the credit reports had the same credit line listed numerous times. This can include home and car loans.

To help reduce errors, credit applicants should use a consistent form of their name. You may also visit the three credit bureaus, Equifax, Experian, and TransUnion or annualcreditreport.com to request a free copy of your credit report.

Georgia law requires credit agencies to provide one free credit report a year to its residents. If you find errors in your credit report, federal law requires that the bureaus correct the errors within 30 days.

For your free credit evaluation email dwalters@integritymtgonline.com.

Source: Credit report errors may cost you a job
CnnMoney.com
June 17, 2004

Mortgage Rates Fell But How Long Will It Last

Recently the Federal Reserve unexpectedly announced a $500 billion budget for buying mortgage debt from GSEs, Fannie Mae and Freddie Mac, and the demand for mortgage backed securities increased dramatically.

This news helped mortgage rates reach their lowest levels since January 22, 2008.

January 22, 2008, was the date of another economic surprise, a 0.750 percent Fed Funds Rate cut. This move was intended to promote economic growth and development and it is federal interventions like these that make predicting mortgage rates difficult. As we know, mortgage rates don’t move to the beat of just one drum.

Typically, these interventions are followed by uncertainty on Wall Street which could lead to higher mortgage rates. For example, the 30 days following January 22nd, mortgage rates increased from a 3 year low to a 3 year high. I’m not saying that this is what will happen this December, but rate trends tend to repeat themselves over time.

Today, rates are still near historic lows.

Please speak with me today at dwalters@integritymtgonline.com for your free mortgage consultation and rate quote.

Mortgage Rate Watch

As the unofficial holiday shopping season is underway, there are five economic indicators that will be released this week. Those indicators could have a significant affect on mortgage rates.

1. The November manufacturing index will be announced today. This index looks at manufacturing opinions within the current market. If the index reports a low number, it could indicate lower rates.


2. Wednesday morning’s release of the 3rd Quarter Productivity report. It is anticipated that this report will show lower report on worker productivity.


3. The third report this week is the Fed Beige Book, named after its cover, features regional economic activity. This report significantly impacts monetary policy, therefore any surprises will have mortgage rates quickly changing in either direction.


4. The Factory Order’s report for October will be released on Thursday. This report typically does not influence mortgage rates, but it will to some degree if the report does not meet current expectations.


5. The final and most important report of the week is the Labor Department’s November Employment report. This report details unemployment rates and new jobs created. If the findings of the report indicate unemployment over 6.8% and no new job growth, mortgage rates will remain low. However, if the unemployment rate were to stay the same with job growth from the holiday season expected, mortgage rates will rise.

Expect rate changes Monday, Wednesday, and Friday with a possibility in rate fluctuates on other days as the markets react. If you would like a free personalized mortgage consultation or rate quote email dwalters@integritymtgonline.com.