Dallas TX home loans, real estate loans, home finance information – Envoy Mortgage

What is Happening in the Mortgage Market

Government Regulation Clogs the Pipes - What that means to you

July 15th, 2009 3:43 PM

Government Regulation Clogs the Pipes

It's no secret that many facets of lending and real estate have changed as a result of the credit crisis. In addition to tightened lending practices that resulted from rising mortgage delinquencies, Washington has been heavily involved in altering the way lenders do business today.

Two individual pieces of legislation impacting our business need to be taken into account when determining closing dates for purchase transactions.

Home Valuation Code of Conduct
The Home Valuation Code of Conduct (HVCC) went into effect May 1, 2009. Intended to shield appraisers from undue influence from loan officers and lenders, this legislation installed a "firewall" between those individuals directly involved in the origination of the loan from the selection of and contact with appraisers.

HVCC also requires that borrowers receive a copy of the appraisal a minimum of three days in advance of closing. Part of the kicker here is that "received" is considered, in effect, three business days after the appraisal has been mailed to the borrower.As HVCC requires a firewall between the originator and the appraiser, the time to receive an appraisal has increased, in some cases by as much as two weeks or more. While this may not always be the case, it is important to take into consideration when considering closing dates. Today, conservative closing dates are mandatory to properly manage expectations of all parties.

Housing and Economic Recovery Act
The Housing and Economic Recovery Act (HERA) amends and impacts several aspects of obtaining a mortgage, the disclosures required for borrowers, and the timing of their delivery. This impacts the minimum time required to close, and should any changes be made to a loan application that could impact the Annual Percentage Rate (APR), this could impact the closing date.

Other than paying for a credit report, lenders may not accept any additional fees from a borrower until four business days after disclosures have been provided to or mailed to a borrower. This has the potential to delay several aspects of the application process.

Finally, upon making application, a borrower is provided a Truth in Lending (TIL) statement, detailing the total expected costs that could be incurred over the life of the loan. Should anything change in the loan application that could change the APR by more than .125%, a new TIL must be reissued to the borrower a minimum of 3 business days before closing. Items impacting the APR could include a borrower accepting a higher interest rate than initially qualified by floating their rate at application, a change to the loan amount, a change in product, a change in closing date, and any changes to fees.

What Now?
While there is more we can discuss on the specifics of these legislative implications, I felt it important enough to let you know now that I would not recommend you write purchase contracts with short closing time frames.

I will be preparing additional information you can provide both your buyers and sellers to help explain the rationale behind not scheduling closing dates in advance of 30 days at a minimum and ideally not less than 45 days.

Thank you again for your business and if you have any questions, please pick up the phone and call me.

Richard Woodward

Banker / Senior Branch Manager

When Trusted Advice Matters

Mortgage Pros is Now Envoy Mortgage

Office: (972) 661-5136 Fax: (972) 314-9647

17311 Dallas Parkway Suite 173 Dallas, TX 75248

Visit Us Online - www.Envoy-Mtg.com

Posted by Richard Woodward on July 15th, 2009 3:43 PMPost a Comment (0)

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Homebuyer Protection Legislation that could hurt

July 31st, 2009 2:51 PM

Richard Woodward
Banker / Senior Manager
Envoy Mortgage Pros
Phone: 972-661-5136
Fax: 972-248-7754
Rwoodward@Envoymtg.com
www.Envoy-Mtg.com

Homebuyer Protection Alert!

Recent Federal legislation can impact your closing date. When completing your Purchase Agreement, even if you are prepared to move forward and close quickly, a more conservative timeframe of at least 30-45 days from the time of the contract acceptance would be a more realistic expectation at this time.

Listed below is information on two pieces of legislation that stand to impact your closing date, and a few bullet points that explain the reasoning behind and effects of each measure.

HVCC: Home Valuation Code of Conduct
HVCC was designed to ensure that appraisals are conducted objectively and without pressure from parties with an interest in the transaction. Under HVCC:

The appraisal and selection of the appraiser will be ordered by someone not directly involved in the origination of the mortgage. This could be either someone else within the mortgage company or a third-party appraisal management company.
A copy of the appraisal must be provided to the homebuyer/borrower no less than three days before closing.
The minimum time expectations for receipt of the appraisal should be a few weeks and not days. (While receipt of the appraisal may be received in shorter timeframes, conservative expectations are warranted.)
Communication between the appraiser and the originating mortgage professional is prohibited. It is imperative that the agents involved in the transaction be prepared at the time of inspection to offer supporting value information if warranted.

HERA: Housing and Economic Recovery Act
HERA was designed to ensure that the borrower(s) involved in the transaction are given accurate disclosure information (Truth in Lending Statement pertaining to Annual Percentage Rate or APR) regarding the loan they are applying for and adequate time to re-evaluate their decision to proceed in the event of any changes that would impact their costs to finance. Under HERA:

No fees may be collected for the transaction other than those for running a credit report at the initial time of application. Additional fees may be collected only after four business days.
Should the APR change by more than .125% on a fixed rate loan or .250% on an adjustable rate loan, the lender must disclose the new APR and the borrower must have a minimum of three business days to review the information before the transaction may proceed.
Items that can trigger re-disclosure requirements include a change(s) in the loan amount, closing date, loan program, any fees that impact the APR or interest rate from the rate indicated on the original loan application.
In cases where documents are sent by mail to the borrower related to re-disclosure of APR and/or providing a copy of the appraisal, anticipate six business days (three to allow for mailing and three to allow adequate time to review them) before a closing can occur.

Some of the items that may cause the APR to change are:

Change in Closing Date
Change in Sales Price
Appraised Value Coming in Lower then Anticipated
Interest Rate Change- (including lock extensions)
Changes in seller contributions
Fee Changes including certain lender fees, title company fees, third party fees and how these are allocated.

Please be aware of these. Some things you can do to protect your clients:

Use Seller Temporary Residential Lease Backs
Keep Lender aware of each and every change.
If you feel you may need to change lenders, get started sooner rather than later. Even if you are just setting up a Plan B.

Mortgage Interest Rates*

Rates as of Friday, 31st July, 2009:

	Conforming	APR	Payment per $1,000	Jumbo	APR	Payment per $1,000
30-Yr. Fixed	5.000%	5.131%	$5.37	5.500%	5.590%	$5.68
15-Yr. Fixed	4.500%	4.723%	$7.65	5.375%	5.528%	$8.10
7-Yr. Fixed ARM	4.375%	4.501%	$4.99	5.250%	5.339%	$5.52
5-Yr. Fixed ARM	4.000%	4.124%	$4.77	4.750%	4.836%	$5.22
5-Yr. Int. Only	4.750%	4.879%	$3.96	4.875%	4.962%	$4.06
30-Yr. FHA	5.000%	5.131%	$5.37	000%	0.000%	$0.00
30-Yr. VA	5.000%	5.131%	$5.37	5.375%	5.465%	$5.60
USDA 100% Financing	5.250%	5.383%	$5.52	000%	0.000%	$0.00

*Rates are subject to change due to market fluctuations and borrower's eligibility.

Pricing assumes 20% down (excludes USDA 30 Year Fixed); loan amount greater than $200,000; owner occupied purchase; a 30 day lock; fully documented; and 1% origination and credit score above 760. Jumbo Loans >$417,000 but <$500,000, and credit score above 760. Jumbo ARMS require 25% down.><$500,000

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Richard Woodward
Envoy Mortgage Pros
17311 Dallas Parkway Suite 173
Dallas, Texas 75248

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Posted by Richard Woodward on July 31st, 2009 2:51 PMPost a Comment (0)

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Daily Rate Lock Advisory 7-22-09

July 22nd, 2009 1:56 PM

Wednesday's bond market has opened down slightly with no relevant economic new scheduled for release today. The stock markets are showing minor gains with the Dow up 17 points and the Nasdaq up 5 points. The bond market is currently down 3/32, but we will still likely see an improvement in this morning's mortgage rates.

Fed Chairman Bernanke is in the second stage of his semi-annual testimony to Congress on the status of the economy and monetary policy by testifying to the Senate Banking Committee today. There is little likelihood of him saying anything different from yesterday's testimony. Therefore, I am expecting little reaction in the markets and mortgage rates this morning or afternoon.

Tomorrow brings us the release of June's Existing Home Sales figures from the National Association of Realtors. This report gives us a measurement o f housing sector strength and mortgage credit demand, but it is not considered highly important and often has a minimal impact on mortgage rates. Current forecasts are calling for an increase from May's sales totals. A smaller than expected increase or a decline in sales would be considered good news for bonds and mortgage rates because a weak housing sector would make it difficult for the economy to recover anytime soon. However, unless this data varies greatly from forecasts it probably will not lead to much of a change in rates.

The Labor Deportment will post weekly unemployment numbers early tomorrow morning. They are expected to show that 558,000 new claims for benefits were filed last week. This would be a sizable increase from the previous week's 522,000 claims, which would be considered good news for bonds and mortgage rates. However, this data is not considered to be highly important to the markets because it tracks a short period of claims. So unless it varies greatly from forecasts it probably will have little influence on tomorrow's mortgage rates.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Posted by Richard Woodward on July 22nd, 2009 1:56 PMPost a Comment (0)

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