Archive for the 'Mortgage News' Category
New HVCC Regulation: Could it Put YOU out of Business?
April 29th, 2008 categories: Mortgage News
There is very little time to get your voice heard on this critical regulation that could have dire consequences to your business, and the housing industry as a whole.
In a call to action received from David Biggers, Chairman, a la mode, inc., “… a nearly silently adopted regulation which could very well be the most dangerous restriction ever placed on the mortgage industry. It literally threatens to eliminate mortgage brokers almost overnight.”
According to Biggers, the new regulations came out of a lawsuit brought by the New York Attorney General involving coercion of appraisers by large institutions. In the settlement agreement, the GSE’s (Fannie Mae and Freddie Mac), and the Office of Federal Housing Enterprise Oversight (OFHEO) agreed to change national appraisal rules-in exchange for the Attorney General’s office terminating its investigation of the GSE’s.
He further explains, “Unfortunately, while we believe the agreement has the best of intentions, the hastily written embedded regulations (called the, “Home Valuation Code of Conduct”, or HVCC), do not solve the problem and in fact severely punish agents, mortgage brokers, appraisers, and ultimately consumers.”
“If there was ever a case of the cure being worse than the disease, this is it.”
Although, this issue deserves far more discussion and analysis, regrettably, in the interest in and lack of time to get your voice heard, I will simply provide two links that should further explain the proposed regulation and leave the analysis and any further input to you.
To have your voice heard by 5:00 PM CST today, http://www.alamode.com/HVCC-MB.
And, visit, proposal [PDF], to judge for yourself.
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Borrowing For Home Could be Even more Difficult
April 1st, 2008 categories: Mortgage News
New lending underwriting standards could make it more difficult for you to qualify for the loan you want. This is not an April Fool’s joke. Although, I wish it was.
Last Friday, Blue Sky Lending was sent a memo from one of its’ most used wholesale lenders, stating that effective April 7, 2008, the company was going to impose changes to their underwriting guidelines. Now, that in and of itself is not unusual, especially of late. Recent market and credit conditions have caused lenders to make some pretty radical and broad changes with regard to the products offered to customers and to the thresholds that must be met by borrowers to qualify for those products. 
Most home loan shoppers are aware that the days of “easy money” and loose lending practices are, all but a memory. Borrowing 100% of a homes value has become a near impossibility. It has once again become standard that banks and lenders will finance no more than 80% loan-to-value (LTV). Now, there are certain exeptions that will allow a borrower to finance more than 80% of the homes value, but they have become increasingly scarce and limited to only the most qualified borrowers. Those are people with great credit, typically 720 and above, and strong incomes.
But now, as this particular memo states, those lenders’ quidlines will change to require 25% down for the purchase of a single unit residence or rate/term refinance and require a minimum credit rating of 700. These guidlines become even more stringent as you move into two-unit and multi-unit purchases and cash-out refi’s.
Do these changes indicate an industry trend to come? Well, it is impossible to say with certainty. But, I would venture to say that others will soon follow.
So, my suggestion if you are currently working on a purchase or refi, lock it up quickly and move forward before you get caught by any coming changes that could impact your ability to do so in the future.
The good news is that there are still some good subsidy programs, such as Chico’s Mortgage City Subsidy Program which allows a qualifying first-time home Buyer to borrow up to $70,000 to help fill the gap. FHA programs that allow a borrower to finance up to 97% of a homes’ value will surely grow in popularity and should help fill the gaps left by other products.
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