Lenders are looking for ways to way to minimize risk and fraud and ordering that pizza might make the difference in getting that loan!

Data mining companies are used by lenders to gather different types of information on the borrower. One type of data collected is address verification to compare where you have your pizza delivered to see that it matches the address on your loan application!

These companies gather the available information from different sources and avenues to glean snap shots of a borrowers credit-worthiness. A lender once told me that he looks for 2 things when considering lending to a borrower – not only their ability to pay, but their willingness to pay.

Read more detail in the LA Times…

Interest rates are at an all time low of 4.57% for a 30 year, fixed rate loan according to a recent survey by Freddie Mac.

But now there is much speculation if this fabulous interest rate will keep the housing market at the fever pitch it was prior to the April 30th deadline for first time homebuyers to enter into escrow to receive the $8,000 federal tax credit.

Check out for yourself the chart that Don Nelson Team compiled for the  number of homes sold in the past 12 months for Ventura, Oxnard and Camarillo. Which city do you think hiccuped but has now rebounded to fever pitch?

If you’re not actively looking to buy, you won’t notice that interest rates appear to be creeping up. But if you’re in the market (or thinking about it)  it’s good to understand what drives interest rates. This past Wednesday was a very important milestone for mortgage rates. Why? Read the rest of this article »

Because the FHA is losing money on record foreclosures (their minimum reserves should be above 2% but were at 0.53% in November), they announced this week that they’re increasing the upfront premium from 1.75% to 2.25%. There has also been political pressure to increase the down payment (currently at 3.5%) to 5%, but as of now it’s still at the 3.5% level. FICO credit score minimums have been raised to 580 (lower FICOs will require a higher down payment). For complete details, here’s the HUD Mortgagee letter.

Yesterday the Fed made 2 decisions that fundamentally affect the real estate industry. First, they kept the federal funds rate (what banks charge each other for overnight loans) unchanged. Secondly, and more directly, they decided to extend their purchase of mortgage backed securities, which has kept interest rates low. How do these decisions made so far away affect Joe and Mary Mainstreet thinking about buying a home? Read the rest of this article »

HUD yesterday announced that homes can now be “underwater” up to 125% (compared to the previous 105% limit) of value and still qualify for the Home Affordable Refinance program established earlier this year by the Obama administration. This applies to borrowers current on their payments who have loans currently owned or guaranteed by Fannie Mae or Freddie Mac. Read HUD’s press release for more details.

Interest rates spiked about 1/4 point yesterday as investors worry that the Fed’s pumping of trillions of dollars into the recovery will lead to inflation. The Obama administration has been trying to spur the real estate industry with low interest rates through the purchase of mortgage backed securities, but investors, sensing the market is turning upward, are beginning to NOT invest in those super safe investments, but believe they can get better returns elsewhere. Thus, the returns for the Treasuries must also increase to attract buyers. For more detail, read today’s Wall Street Journal article about these issues.

Over the weekend I caught up on my Wall Street Journal reading, and Friday’s column of  “Heard on the Street – Financial Analysis and Commentary” had a title that caught my eye – “Dream Mortgage Bailout Has a Darker Side”. Hmm, I thought. What’s that all about? Read the rest of this article »

Is a bird in the hand worth 2 in the bush? I was musing at my desk this morning about all things real estate, the stock market, the jobs loss report and the incredibly low interest rates out there. So I asked myself, which is better? To buy today with today’s low interest rates (with the possibility prices may still decline 5%), vs. the idea of waiting for prices to stabilize and then start up (but that interest rates will have climbed back to “normal” to compensate for that stabilization). Here’s how the numbers look…

Read the rest of this article »

Today is Saturday morning and Leslie and I are back from my Tenant in Common Association (TICA) conference in San Diego. With the bombshell announcement by the Fed on Wednesday, I was curious to see how fast interest rates would soften, so this morning I checked a mortgage rate sheet we get daily and was pleasantly surprised to see that rates have softened by about 1/4%. Not too shabby! It would appear the Fed’s decision is starting to have its intended impact on the mortgage market.