Homes For Sale

The heads of Fannie Mae and Freddie Mac have recently indicated they are not high on the idea of principal write downs at all. This should come as no surprise to anyone. The problem with principal write-downs is that they are a Pandora’s Box for banks and investors. If lenders started forgiving principal for borrowers they would open a massive flood that could bury them. There are millions of underwater homeowners in the US. The majority of those homeowners are not willing to consider walking away from their homes. A foreclosure or short sale severely damages credit scores and that is something most borrowers would like to avoid. The banks benefit greatly from this fact. If banks and investors started offering principal write-downs they would certainly be overrun with requests and would have to deal with billions of losses that they currently are avoiding. <

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One of the best kept secrets for many real estate agents, home buyers and investors, is the Homepath loan. This is a type of mortgage specifically for purchasing Fannie Mae foreclosed homes, and there are some great advantages to buying with this program. These foreclosures are priced right from the start, you can buy with a low down payment (3% down for owner occupants and 15% down for investors) and there is no mortgage insurance. Now we have a new type of Homepath loan, the Homepath Renovation loan. This mortgage allows buyers to purchase a Fannie Mae foreclosure and add the cost of repairs and improvements into one loan, with one closing. The biggest problem when buying a foreclosure is often that the home needs work, either repairs immediately, or deferred maintenance.

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As the housing bubble was inflating in the mid 2000′s one of the often-abused mortgage types was the ARM or adjustable rate mortgage. As a result of that abuse ARM’s have gotten somewhat of a bad reputation among consumers. But when used correctly ARM’s can be excellent mortgages. That is why government agencies like the FHA and VA still offer ARM’s, as do quasi-government agencies Fannie Mae and Freddie Mac.

The appeal of ARM mortgages is that the rates can be significantly lower than 30 year fixed mortgages. For instance, in recent weeks rates on 5 year ARMs were in the mid threes. That is nearly 1.5% lower than the average 30 year fixed interest rate in the same time period.

When is an ARM appropriate? The most obvious answer is ARMs are great for people who plan to sell their homes in the next 10 years or less. It is n

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After slowly rising for more than four straight weeks interest rates on government-backed and conventional mortgages finally dipped again over the last few days. The dip in rates is a welcome development to folks looking into refinancing. Rates on mortgages largely track the the yields on the 10 year treasury bond and with the recent dip in the stock market, yields on the 10-yr note have dropped as well. If you have been thinking about refinancing to a lower interest rate contact us in the sidebar right away to learn more about the programs available. Dips in rates normally don’t last long so now might be a good time to lock in a better rate.

The recent budget compromise reached in Washington DC that prevented a government shutdown had a direct effect of government-backed mortgages. The FHA program is an entirely government program so a government shutdown could have put a real crimp in the FHA mortgage originating and closing process. Thankfully, cooler heads prevailed and FHA loan proceed without interruption.