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I’ve written about the Polk County, Florida USDA Home Loans program before, but it really bears a quick highlight here.   If you have steady employment, good credit, but just can’t manage to save up for a down payment, then this is the loan for you.

Here are some basic features about the USDA Home Loans program:  

• 100 Percent Financing – means you do not have to pay any money down
• No Monthly Private Mortgage Insurance – normally seen with FHA and conventional loans
• No First Time Homebuyer restrictions
• Great Interest Rates
• Sellers can contribute up to 6% of the sales price towards buyer closing costs
• 100% gifting permitted for all closing costs
• No reserve requirements – means you do not have to have a set amount of money in the bank to do this loan
• No 90 Day Flip rule – great for investors or those who rehab Bank Owned / REO / foreclosed properties

Roll Closing Costs Into Your Loan!

There’s one really great additional feature of USDA Home Loans.  If your home appraises above the sales price, you can fold in some or all of your buyer closing costs.  In fact, you can ultimately finance the full purchase price and closing costs to 103.5% of the appraised value.  Say your buy a home here in Florida for $100,000.  If the house appraises out at $105,000, then you may use the additional $5,000 to cover closing costs or make repairs on the home!

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Florida mortgage markets posted four good days last week and one awful one.  Unfortunately for rate shoppers in Florida , that one bad day outweighed the gains of the other four and mortgage rates worsened on the week overall.

Despite re-touching all-time lows on Tuesday and Wednesday, Conforming and FHA mortgage rates moved higher on the week.

There wasn’t much domestic data on which for mortgage markets to move so rates took their cues from global economic activity. Strong data from Japan and China, plus an improving outlook from the Eurozone, sparked optimism among Wall Street investors. Cash poured into the stock market and it happened at the expense of bonds — including the mortgage-backed ones.

It’s the primary reasons rates rose and not even the worst Retail Sales report in 8 months could undue the damage.

Often, weak Retail Sales data causes mortgage rates in Florida to fall. Last week, however, that wasn’t the case.

This week, there’s cause for rates to rise again with Wednesday emerging as a “data day.”

First, at 8:30 AM ET, the government releases two key housing statistics and one major gauge for inflation — Housing Starts, Building Permits and Producer Price Index, respectively.  Strength in any or all three should lead mortgage rates higher.

Then, at 5:45 PM ET, Fed Chairman Ben Bernanke makes a public speech and anytime Bernanke speaks, Florida mortgage rates can move.

Mortgage rates in Florida remain unnaturally low and a lot of Americans have taken advantage already. If you’re a homeowner and you’ve wondered whether or not a refinance makes sense, give me a call right away. Low rates like this can’t last forever, so lock one in while you can.

Technorati Tags: Florida Mortgage, Florida Mortgage Rates, Japan, Mortgage Rates, Mortgage Rates in Florida, Retail Sales

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Tampa Mortgage markets saw some improvement this past week on weaker-than-expected data and a fairly flat if not deadpan statement from Uncle Ben and the good folks at the Federal Reserve.

Mortgage rates in Tampa, Florida got back most of the ground they lost after nearing a 6-week high the week before.  Overall, conforming mortgage rates were down last week.

News of the Federal Reserve’s announcement made headlines last Wednesday, but as usual – what made the markets move were the less-reported stories.

For one, Consumer Confidence unexpectedly fell.  This is a key gauge for economists and for Wall Street because, in theory, a confident consumer is more likely to buy goods and services — a key element in any economic recovery.

Other recovery-slowing news included:

• Retail Sales falling well short of expectations
• An increase in Initial Jobless Claims

To be fair, there were a handful of good-for-the-economy stories last week, too, but markets dwelled more on the negative ones.  While the stock market’s 4-week winning streak was ending, investor cash was moving to mortgage bonds, causing rates to fall.

This week, there isn’t much data with which traders can play so expect mortgage rates to trade on emotion and momentum instead.  This is good for rate shoppers when mortgage rates are falling, but if they start to rise, last week’s gains could be wiped out in the span of an afternoon.

It’s happened twice like that already since Memorial Day.

If you’re not locked in to a mortgage rate yet, keep a watchful eye on the markets and your loan officer on speed dial.  Remember — every 1/8 percent rate hike adds nearly $100 per $100,000 borrowed annually.

Technorati Tags: Mortgage Rates, Tampa Bay Home Loans, Tampa Bay Mortgages, Tampa Home Loans, Tampa Mortgage

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I received a question yesterday from Kevin Curtis – Real Estate Agent  at Minnesota Properties – regarding the real estate title seasoning rule for FHA mortgage financing.  Specifically, the question pertained to the time a house “flipper” is required to wait in order to sell a home to a buyer using an FHA mortgage.

Based on the latest data from the FHA via Handbook  Section 4155-2.4.7 entitled Prohibition on Property Flipping, the FHA rule plays out like this:

FHA Rule on Financing Flipped Property

If a property is re-sold 90 days or less following the date a seller takes possession of title, the property is not eligible for a mortgage insured by FHA.

FHA defines the Seller’s Date of Acquisition and the Re-Sale Date as follows:

• Seller’s date of acquisition: the date of settlement on the seller’s purchase of that property, and
• Re-sale date: the date of execution of the sales contract by a buyer intending to finance the property with an FHA-insured loan.

The only exceptions to the 90 day resale restriction described in HUD 4155.2 4.7.e are for

• properties acquired by an employer or relocation agency in connection with the relocation of an employee
• re-sales by HUD under its Real Estate Owned (REO) program
• sales by other United States Government agencies of single family properties pursuant to programs operated by these agencies
• sales of properties by nonprofits approved to purchase HUD owned single family properties at a discount with resale restrictions
• sales of properties that are acquired by the seller by inheritance
• sales of properties by state and federally-chartered financial institutions and government sponsored enterprises
• sales of properties by local and state government agencies, and
• sales of properties within Presidentially Declared Disaster Areas.

Any subsequent re-sales of the properties described above must meet the 90 day threshold in order for the mortgage to be eligible as security for FHA insurance.

Thanks to Kevin Curtis for asking this question.  With home prices so low on houses that most definitely qualify on handyman specials – this FHA 90 day rule on insuring flipped houses is something for folks to remember if they plan to use FHA financing.

Technorati Tags: 90 Day FHA Rule, FHA Financing, FHA loan, Financing Flipped Houses, Flipped Properties, Kevin Curtis, Selling Flipped Houses

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If you’re a social media geek/guru/etc. here in Polk County, FL – you really need to get hooked up with The Polk County Netizens.  Every six weeks they hold a mixer for those interested in all forms of new media. To use the words of Chuck Welch, one of the groups founding Paternal Units:

“If you’re a Polk County social media type – meaning that you write a blog, publish a news site, tweet, journal, or send smoke signals – you need to be a part of the Polk Netizens.”

This crazy group is a mixed bag of local area business folks, news people, artists, musicians, and the like, and we’ll be at it again on Tuesday evening, May 19th as part of a group “field trip!” to watch the Lakeland Flying Tigers baseball team battle the Clearwater Threshers live at Joker Marchant Stadium.

The Flying Tigers have offered the group special $3 night of the game tickets — so don’t buy early!

Ballpark food is available; so take the opportunity to ignore your diet. We’ll have time before the game starts to chat a bit, and seats together during the game.

It’s an all ages affair, so be sure to bring your family to this event!

Date: Tuesday, May 19, 2009
Time: 6:30pm – 9:30pm
Location: Joker Marchant Stadium

For more information,email: polknetizens@gmail.com

Technorati Tags: Chuck Welch, Lakeland Florida, Lakeland Flying Tigers Baseball, polk county florida, Polk County Netizens, Social Media, Twitter

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Florida FHA homebuyers may soon be able to use the current $8,000 first-time homebuyer tax credit to cover the required 3.5% downpayment via a process called “monetization,” according US Department of Housing and Urban Development secretary Shaun Donovan.  I caught wind of this via a May 12, 2009 Housing Wire article.

Apparently, Donovan released the announcement while at a National Association of Realtors legislative summit this morning, but the Housing Wire article stated that HUD likely won’t release a formal announcement on this topic until next week.

How The FHA Monetization Process Might Work

Most likely, this new FHA-initiated Downpayment Assistance Program (DPA) will allow FHA-approved lenders to monetize the first-time homebuyer tax credit through short-term bridge loans, providing borrowers with access to the funds at the closing table.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan said, according to the NAR.

The tax credit arrived as part of the American Recovery and Reinvestment Act of 2009 for qualifying taxpayers that buy homes in 2009.  We’ll see whether this monetization program actually takes root.  Stay tuned, as more information will be sure to follow soon.

Technorati Tags: $8000 tax credit, American Recovery and Reinvestment Act of 2009, Downpayment Assistance, First-Time Homebuyers, Florida FHA Loans

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Florida homeowners are no strangers to the idea of mortgage modification, as put forth via wide-spread publicity efforts announcing home loan modification as part of President Obama’s foreclosure-prevention program. As recently as last week, Chase Mortgage, the servicing side of JP Morgan Chase, had negotiated more than 15,000 modifications under this program.  Chase Mortgage isn’t’ the only major bank facilitating mortgage modifications.

Back in April of 2009, Bank of America delivered as many as 100,000 letters to borrowers who could potentially benefit from home loan modification. Although BOA has yet to release information as to how many mortgage modifications it’s performed, the lender is clearly involved in the process.

Making Home Affordable – Key Goals and Intended Outcomes

When the Making Home Affordable plan went into effect on March 4, the Obama administration believed that it could help as many as 4 million people steer clear of mortgage default and/or foreclosure. The plan’s key focus involved encouraging lenders to help past-due borrowers or those at-risk of falling into this category lower their interest rates to levels where their monthly housing payments would not exceed 31 percent of their gross monthly income.

While the Making Home Affordable program isn’t available to all Florida mortgage borrowers, it may very well be an option for you.  To find out if this program fits your individual situation, follow these important steps:

Step 1: Go to the Making Home Affordable Website

You can find everything you need to know about the Making Home Affordable program on their official website.

Step 2: Determine Your Eligibility

Once you get to the site, select the option that says “Find out if you are eligible” and then go to the “Home Affordable Modification” option. (Note: If you’re behind on your mortgage, don’t go to the “Refinancing” option – as this is just for those who want to lower their interest rate but are NOT delinquent yet.)

The site makes use of a Five Question Quiz.  Go ahead and take it.  Taking your answers into consideration, the site will let you know whether you fit the scenario for someone who might qualify for a mortgage modification.

If you qualify for Obama’s Mortgage Modification Program  – then you fit the following:

• You bought your house before Jan. 1, 2009
• You owe less than $729,750
• The home is your primary residence
• You are currently delinquent on your mortgage payments
• Your payment equals more than 31% of your monthly gross income

Once your eligibility is determined, the site will provide you with an eight-item checklist of items you’ll need to provide your lenders so that the mortgage modification process can begin.

Step 3: Collect Required Paperwork

Like any mortgage approval process, you’ll be required to submit specific documents to support your application. Documentation typically asked for by lenders offering home loan modification through Making Home Affordable will ask for the following:

• Household-income documentation, such as pay stubs; tax returns; savings account records
• Mortgage statements; second mortgage info, such as home-equity loans statements
• Credit card bills
• Information on other debt, including student and car loans

Something else you will be asked to provide is a written “hardship letter” describing exactly what conditions led you to become delinquent on your home loan.  Reasons that may apply to you include job loss, unforeseen medical expenses, or divorce.

Well-Written Hardship Letters Can Make or Break  Your Home Loan Modification Application

A well-written hardship is perhaps one of the key determining factors in being granted home loan modification approval.  Think of these letters as a means of personalizing your situation.  No one applicant’s circumstances are the same, and as in any case where folks are competing for funds – the most compelling situations win.  Remember that your financial documentation may prove too cryptic to point out the specifics – the nuances, if you will – that caused your home loan delinquency – this is where your hardship letter can really help.

Something to keep in mind regarding your hardship letter:  Rather than writing that you made a bad decision in that you never could have afforded your home loan in the first place, talk about the job loss or health problem you suffered and how it kept you from keeping up with your payments.  Explain that things are better now, that you’ve recovered or that you have gained new employment – and that you’re working on getting back on track with your financial obligations.

Failing to explain these specifics may cause your lender to look at your situation as a simple case of financial irresponsibility or carelessness.  To guard against this – be sure to tell them the complete story.

Step 4: Follow Up with Your Mortgage Lender

When you complete your home loan modification application packet, be sure to follow up with your mortgage servicer or lender (whoever it is that you send your monthly mortgage payments to).   You should be able to continue your mortgage modification program with your lender via phone, mail and email – with no need to meet anyone face to face.

Step 5: Be Prepared to Wait for a Decision

Perhaps one of the hardest things for applicants participating in the Making Home Affordable program to do is to wait for lenders to approve their program.  Lenders may choose to lower your mortgage debt by either reducing your interest rate, lengthening the duration of your mortgage, or reducing your overall mortgage balance.

In nearly all cases, your lender will start by shifting your mortgage payment down to match 38 percent of your gross monthly  income. After this is accomplished, the government provide compensation to your lender allowing them to reduce your payment down to 31 percent of your gross monthly income.

Once your monthly mortgage payment has been lowered to 31 percent of your gross monthly income, you’ll receive new paperwork which, when signed, will start a new mortgage loan with your lender that reflects the modified terms.  The total process can take as many as four to six weeks -so hold tight.  Lenders do hope to expedite the home loan modification process, but this will only happen as new staff is added to help speed up the processing time frame.

Remember:  You’re On Probation for Three Months!

Something you’ll want to stay mindful of is the fact that your home loan modification arrangement with your lender is granted on a 3 month probationary period – pending your on-time payments for this length of time.  Assuming you stay current for this time frame, your mortgage payment arrangement will then become permanent.

Special Note for Florida Mortgage Borrowers Seeking Home Loan Modification

As noted above, mortgage lenders are not required to lower the overall amount due on your Florida home loans.  This, I feel, is one of the biggest problems with the Making Home Affordable program.  In many cases here in Florida, home owners will not be able to maintain payments if the only modification they receive is the payment amount being lowered to 31 percent of their gross monthly income.  So many homes here in Central Florida have dropped to below 50 percent of their initial value that this single modification just won’t cut it.   Put simply, it’s very likely that these borrowers will choose to let their homes go into foreclosure or will pursue short sales in an effort to wipe the slate clean.

That said, I do feel that lenders are becoming smarter (or more realistic) as we move further into the current housing situation.  More and more bank owned homes and short sales are coming in with lenders paying some or all of buyers’ closing costs – which was not the case early on.  As such, lenders may also be more willing to reduce debt loads in addition to lowering payments.

Technorati Tags: Florida home loan, Florida Mortgage, Home Loan Modification, Making Home Affordable, Mortgage Modification

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Florida mortgage and home loan borrowers should take note that – for two months in a row now – the number of homes under contract to sell increased — further evidence that housing markets may have already bottomed.

News from an industry trade group reports that the Pending Home Sales Index rose by 3-plus percent last month.

A “pending” home is one that’s under contract but has yet to close.  This is one reason why the Pending Home Sales Index is an imperfect statistic.

Florida Home Buyers and Sellers Take Note:

Just because s under contract doesn’t mean it will actually sell.  A lot can go wrong between the date of agreement and the date of closing.  Deals fall apart all the time.  But, when the number of pending contracts rises, we can infer that buy-side demand for homes is strong.

It’s likely that the number of homes under contract is being influenced by a combination of low Florida  mortgage rates, relatively inexpensive homes, and various tax credits for certain Florida homebuyers.  Overall, it’s spurring demand and that’s part of what’s captured by the Pending Home Sales Index.

So long as the demand for homes outpaces its supply, Florida home prices are expected to rise.

Technorati Tags: Florida Home Loans, Florida Mortgage, Mortgage Rates, Pending Sales

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Florida Mortgage Rates May Increase Pending the Fed’s Most Recent Position

One of the questions I get most as a  Florida mortgage broker relates to the status of mortgage rates at any given moment.  While there is really no way to gauge mortgage rate movement with absolute precision, there are a few things to look out for when it comes to getting a sense for what they’ll do over a fixed period of time.

Dan Green posted a great article today over at his Mortgage Reports blog where he cited the most recent home loan  rate trend survey, which might provide us with some answers.  This survey covers Conventional Mortgages only, and as such doesn’t pertain to VA mortgages, FHA mortgages, jumbo mortgages, or foreign national mortgages.

Based on the survey, results break down as follows:

• 19% of the experts and analysts reporting believe mortgage rates will increase
• 31% of the experts and analysts reporting  believe mortgage rates will decrease
• 50% of the experts and analysts reporting  believe mortgage rates will remain flat

For my money – I believe – as does Dan does over on his mortgage blog - that mortgage rates will increase.

Here’s what Dan told Bankrate.com:

“Inflation concerns resurface after the Fed’s April 28-29 meeting.”

Watch the Federal Open Market Committee Press Release for Mortgage Rate Movement Signs

The Federal Open Market Committee (FOMC) will meet on Monday and Tuesday of next week.  Most mortgage and financial experts content that they’ll hold the Fed Funds Rate steady inside the present rate of 0.000 to 0.250 percent.

This rate hold won’t be the news, however.  What will make news is the Fed’s press release after this FOMC meeting takes place.   We’ve said it here before: What Uncle Ben and Company “say” is often more impactful than what they “do.”  Here’s why…

Most American’s believe, incorrectly, that the Fed controls mortgage rates.  If this were the case, mortgage rates would have increased between 2004 and 2006 while the Fed was inflating its interest rate from 1 percent to more than 5 percent.  We also see this when the Fed rate moves back down.

Fact: The Fed Does Not Set Mortgage Rates

See, the Fed doesn’t set 30-year fixed mortgage rates.  Fed Funds Rate changes are established for the sole purpose of speeding up or slowing down the US economy.  Period.  Now, it’s true that the Fed’s policy can exert an influence on mortgage rates in an expansionary economy if the following takes place:

1. Inflation reduces the Dollar’s long-term value
2. Fed Funds rate changes are implemented to contain inflation
3. The U.S. Dollar is tied directly to mortgage rates

Here’s How Florida Mortgages React to Fed Funds Rate Announcements

If the Fed releases a press release that makes reference to inflationary pressures, but the Fed makes no move to shift the Fed Funds Rate either up or down, markets will anticipate a weakening of the Dollar in months to come.  This will, in turn, erode the value of mortgage bonds on Wall Street.

Remember: Lower bond prices mean higher mortgage rates.

Technorati Tags: Fed Funds, Florida Mortgage, Florida Mortgage Rates, FOMC

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Florida FHA Refinance Offers Fast Relief to Homeowners

There are many reasons why folks who currently have an FHA mortgage may want to refinance, but few are better than the fact that the Florida FHA Refinance is perhaps the easiest and best way to lower you interest rate – period.

Today with historically low rates, the FHA streamline refinance loan has helped many homeowners in Florida save money on their current mortgages.

Since the early 1980’s, the Federal Housing Authority (FHA) has been allowing homeowners to refinance their homes under the FHA streamline program. The term “Streamline” refers to the reduced amount of documentation that is necessary to perform this loan.

Here’s what you need to know about Florida FHA Streamline Refinance Mortgages:

1. You must currently have an FHA mortgage
2. Your mortgage must be current with up to date payments
3. The FHA Streamline Refinance must reduce your interest rate and mortgage payment
4. You cannot use the FHA Streamline Refinance as a cash out refinance

There are different FHA Streamline Refinance options your lender may offer:

No-cost refinances where you will pay no out of pocket expenses, but will pay a slightly higher interest rate than you otherwise would.  Lenders pay closing costs for this option.

Closing costs can be folded into the loan amount if there is enough equity in the home to cover them.  This option DOES require an appraisal to ensure there is enough equity.  Note: for refinances without appraisals, the new loan amount must not go beyond the initial loan amount by 1.5%.

FHA Streamlined Refinancing is one of the effective ways you can keep your homes. During these times when foreclosures happen in nearly every neighborhood, it is extremely important that you can afford monthly mortgage payments to stay in your homes. Florida is no exception.

Related articles by Zemanta

• What Every Winter Haven Homeowner Should Know About FHA Streamline Refinance Mortgages (myfhamortgageblog.com)
• Winter Haven, Florida FHA Activity Increasing – US Sees FHA Loan Limit Increase (myfhamortgageblog.com)

Technorati Tags: FHA Streamline Refinance, Florida

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