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Greg Cowart - Mortgage Broker or Lender at The Securus Group
Greg Cowart - Roseville Loan Guy

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No appraisal on a purchase? Yes, it’s real.

It sounds a little on the crazy side but it is true, Fannie Mae and Freddie Mac have announced that some of the purchase loans underwritten to their guidelines will no longer require appraisals. They’ve been allowing this on some loans for years (FHA and VA also does for refinances if they already back the loan), but this is the first time ever for loans used to purchase a home. 

Fannie and Freddie are the quasi-governmental organizations that create the guidelines for about half of all the mortgages done in America today. When they make an announcement like this it’s big and, while it won’t nearly apply to all the loans underwritten to their guidelines, the fact that this is happening at all is very meaningful in the market.

The appraisal waiver will be issued on a relatively small percentage of purchase transactions, mostly because of the high standards that need to be met to receive the waiver. To receive the property inspection waiver eligibility is limited to a maximum of 80% loan-to-value on one unit properties (no condos as I understand the rule), principal residences or second homes only, and there was a prior appraisal collected in the Fannie Mae database from a previous loan transaction.

These rules will severely limit who and what transactions get the waiver, but it is a start and will be very helpful in speeding up those transactions that receive the waiver.

Fannie Mae has already started this (August 19th) and Freddie Mac will begin on September 1st and we at American Pacific Mortgage are participating in the program. Let me know if you have any questions.

Greg Cowart

(916) 412-3313

Keys On Time – Don’t Do It Backwards!

How do you like our new Keys On Time video?

Far too often I run into people wanting to do this backwards. Check out our new video that explains why that is a bad idea (your Realtor agrees with me), and how we help you get your Keys On Time!

Did you know that your property taxes can increase more than 2% a year?

The 2nd installment of property tax bills in California are coming due so I thought it was a good time to bring this up. If you held onto your home through the economic downturn you likely saw your property tax bill decrease (thanks to Proposition 8 that was passed by California voters in 1978), but you may soon be rewarded with a larger tax bill (if it hasn’t happened already).

You may think, “What? I thought Proposition 13 keeps my home’s assessed value from increasing more than 2% a year, thus making it impossible for my tax bill to increase by more than 2%?” While that is true the most your tax bill can increase AFTER IT HAS DECREASED is not an annual cap but based on what your assessed value was BEFORE the value/tax bill was reduced by Prop 8.  If you saw a large decrease in your tax bill after the recession took hold and property values crashed, you could be seeing an equally large increase in your tax bill, much more than 2%, as home prices have recovered to the levels there were in 07′-08′.

It still cannot increase to an amount that is more than it would have had the value/tax bill never decreased, and county tax assessors are not hitting people with this increase all at once so it is usually taking multiple years before the tax bill gets back to where it was pre-recession.

What does my county say my home is worth?

You should have received a tax bill from the county in the Summer, but if you don’t have it you can always cheek their websites…

PLACER COUNTY

SACRAMENTO COUNTY

EL DORADO COUNTY

YOLO COUNTY

What can I do if I think my assessment is too high?

If you feel that your home’s new assessment is higher than actual market value you can ask for a reassessment. Most of the links above have instructions on how to start this process. I can say this is difficult and no guarantee that it will work, but I can also say I have numerous clients that have been successful in having their home’s assessed value decreased, which in turn reduced their tax bill. I can be done! Whatever you do beware of 3rd parties offering help, or pretending to be representatives of the county, asking for large fees to help you process this. Your county’s assessor’s office may have a small administrative fee for the reassessment, but it’s generally not much and definitely not paid to a 3rd party.

 

FHA loan limits increase too!

FHA UpdateFresh on the heels of Fannie Mae and Freddie Mac increasing their loan limits, the FHA has followed suit.

FHA has become one of the go to loan products for first time home buyers, those with low down payments, and those with credit challenges. It is a great product for many people in that not only does it allow one to buy (or refinance) with they otherwise might not be able to, since every FHA loan is insured against default investors love them and the interest rate is generally lower than many other options!

The maximum loan limit on an FHA loan in Placer, Sacramento, Yolo, and El Dorado Counties is now $488,750. This matches the “high balance” loan limit for Conforming loans (those backed by Fannie Mae and Freddie Mac) in these counties announced last week.

Electronic Mortgages the wave of the future?

Today, in our industry, we already do pretty much everything electronically. Pretty much…

But there is a lot of paperwork that still has to be received from the borrower, not to mention signing what seems like hundreds of pages at closing. Due to recent statements by Fannie Mae and Freddie Mac, as well as some new “eNotary” features on the horizon, that could all be changing.

fannie-mae-freddie-mac-roseville-mortgageThe first and most important part of this is the suite of new tools GSE’s Fannie Mae and Freddie Mac are soon to be rolling out to lenders. These tools include things like automated appraisals on certain loans, automatic income verification for most W2 borrowers, and automated asset verification. When applicable these new tools will allow less documentation to have to be faxed/e-mailed to the lender, as well as less time to close, and savings to both the lender and the borrower (especially when the automated appraisal applies).

With these tools Fannie and Freddie are offering some relief from “reps and warrants”, which will create more certainty on the part of the lender and MBS (Mortgage Backed Securities) investors. This should reduce costs for lenders, reduce risk for MBS investors, and (theoretically anyways) should result in shorter loan processing times, lower cost mortgages, and possibly even lower interest rates than otherwise would be able to be offered if these reforms were not implemented.

The automated appraisal will not apply to everyone, nor will the automated income verification (it will not work for self-employed people, for example), but it should result in some documentation relief for most applying for a Conventional mortgage. FHA has no comment. 🙂

The “eNotary” thing is a little further out, beta programs are just beginning, but with the new rules the Fannie and Freddie tools they’re also going to be allowing a fully digital closings, where a notary creates an electronic signature and stamp and all the borrower has to do is click a screen, rather than sign over and over and over again.

Everything will be rolling out in the near future. Of course I will be keeping everyone updated as to the news. This is a VERY big deal when it comes to both the real estate and mortgage industry as it will undoubtedly result in faster loan closings on both purchase and refinance loans, and decreased costs to buyers/homeowners.

USDA Update (important in Lincoln)

We’ve been waiting and waiting, for years now, for the USDA to change the maps of eligible areas for their popular 100% financing loan program.

Since the 2010 census data became available we’ve known it would be inevitable that the maps will change (and they have given us what the future map will look like, see below) removing Lincoln from the eligible area, but the date for this to happen continually comes and goes with no change.

The use of the future property eligibility maps has again been delayed until Congress passes the 2015 budget, so if your area is eligible on the current maps, it will remain eligible, but don’t ask for how long as no one knows that answer.  While you may see December 11th floating around as a date, that is just the date that congress must pass a new budget, vote for another Continuing resolution, or shut down the government.

Bottom line is there is still time to get into contract on a home in a currently eligible area that will no longer be eligible once the new maps take hold (such as Lincoln), but if you are thinking about it there isn’t much more time to make the move. Or is there? Anyone want to bet the move the deadline again?

CURRENT MAP

USDA Current Map

 

FUTURE MAP

USDA Future Ineligible

FHA’s Homeowner Armed With Knowledge blueprint

FHA UpdateLast week the Federal Housing Administration, an arm of HUD (the department of Housing and Urban Development) announced a new “Blueprint for Access” that, if implemented, should lower the cost of having an FHA loan as well as make getting an FHA loan a little easier for some home buyers.

The biggest thing here is the HAWK (Homeowners Armed With Knowledge) program which, in exchange for the home buyer sitting through a short homeowner education course, will cut the historically high FHA mortgage insurance premium factors.

FHA-questions-cost-MIGenerally speaking FHA loans are great. They tend to have lower rates than conventional loans and are easier to qualify for and get closed. The big issue with FHA is the mortgage insurance and how much it can increase a homeowner’s monthly payment.

However due to the housing “crisis” and recession tied to it HUD had to increase the FHA’s cost of borrowing to re-fund its MMI fund (Mutual Mortgage Insurance fund, which losses on FHA loans are paid to lenders from) that had taken a hit due to defaults and foreclosures in 2008-2012. HUD increased both the up-front fee collected on FHA loans (UFMIP) as well as the annual premium that is paid monthly by FHA borrowers as part of their monthly payment to all-time highs; making new FHA loans more expensive than at any time in their history, despite having lower rates than conventional loans.

The HAWK program will reduce the UFMIP by 50 basis points ($1,750 on a $350,000 FHA loan) as well as the annual MIP by 10 basis points ($30 a month on a $350,000 FHA loan).

For those willing to take additional homeowner courses after closing and make on-time payments for the first two years of the loan FHA will reduce the amount of the annual MIP by an additional 15 basis points (another $42 a month on that $350,000 loan, for a total of a $72 reduction in monthly payment).

Right off the top the HAWK program will save an average Roseville/Rocklin/Lincoln buyer between $1750-2,000 off their total loan amount and $70-100 a month off of their payments after two years compared to an FHA borrower that does not participate!

The detailed guidelines will be posted this summer and the program is slated to roll out in the fall. I’ll let everyone know once the program has been implemented and additional details once they are known…

http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2014/HUDNo_14-048

Sincerely,

Greg Cowart

(916) 412-3313 – info@rosevilleloanexpert.com

Delinquencies down to pre-crash levels for first time in 7 years.

A common theme on this blog over the years, “shadow inventory” and the future of distressed sales (foreclosures and short sales), is coming up one more time. While conventional wisdom for years has been every bit of good news on the housing front has been a bunch of hype I have been sharing statistics with you that spells out what has actually been happening.
up-down-real-estate-roseville-rocklin
In reality the future foreclosure rate is determined by one thing, one thing most media source and people never mention, people missing their first mortgage payment today. It is as simple s that. If you read this website you know that I share these statistics every few months or so and the number of people missing their mortgage payments has been going down, down, down; and with it the number of foreclosures 6-12 months later.

The nationwide delinquency rate is lower than any time since Q1 2008, the time we began to see cracks in the market but well before the crash happened. This means the foreclosure rate over the next couple years will be lower and lower too. To boot the actual foreclosure start rate is lower than at any time since Q2 2006!

Shadow inventory,” homes that banks are holding onto or short sales/foreclosures that just haven’t happened yet, the media (and some gloomy Gus’) favorite boogie man is non-existent. The banks have already unloaded their inventory for the most part and home prices have rebounded so much only a small fraction of people still owe more than their home is worth.

I’m sure if you have been in the market to buy or sell a home lately you see that short sales and foreclosures are a very small part of what is out there, when just two years ago they made up the bulk of the market in the greater Sacramento area; including Roseville and Rocklin.

This is all good news!

Sincerely,
Greg Cowart

Senior Mortgage Consultant – 19 Years Experience
info@rosevilleloanexpert.com
(916) 412.3313

PG&E begins work on Roseville gas projects

Earlier this week PG&E began work on a long-awaited modernization project on four miles of natural gas transmission lines and over 100 yards of distribution lines in the city of Roseville. Completion of all parts of the project is expected to take up to six months.

 “These pipe replacement projects will allow PG&E to meet the increasing demand for natural gas to support additional growth in the area and improve the safety and integrity of the natural gas system,” said Erik Kurtz, gas distribution superintendent for PG&E’s Sierra Division. “During these projects, we will work to minimize impacts to customers as best we can, and we very much appreciate the support and patience of area residents and businesses.”pgelogo-roseville-mortgage

http://www.pgecurrents.com/2014/05/13/roseville-pge-begins-two-pipeline-projects

https://www.roseville.ca.us/news/displaynews.asp?NewsID=3558&TargetID=1

The Northern and Central California energy giant will be contacting residents and business owners in the affected areas to provide information and answer questions. Per regular safety guidelines they will vent natural gas from the pipelines they’ll be working on while they work, but the PG&E is encouraging anyone who has concerns about natural gas odors in the area to call them at (800) 743-5000.

New Placer County Tax Website

It was just pointed out to me by a local Realtor (thank you for all the great info you provide on a regular basis, Jen) that Placer County has updated their tax bill website…

placer-county-tax-bill-mortgage

Placer County Tax Bill Search

For any of your property tax bill needs in Roseville, Rocklin, or anywhere in Placer County here is your starting point. Of course you can always call me or your favorite real estate professional and have us do the research for you.

Greg Cowart
(916) 412-3313
info@rosevilleloanexpert.com