The current maximum loan that Fannie Mae and Freddie Mac will back is $729,750. On October 1, 2011, this amount will drop to $625,500.

Read the full article about lower loan limits here.

I discuss the best sites for searching properties to make sure you see accurate and timely information, through negotiations, pricing, repairs, documents, title insurance, the appraisal, and more.  Published by Turner Publishing, the book is available at all major book outlets online.

• They're still difficult to get, but easing a bit from last year
• Jumbos are not getting much easier
• Higher down payments, with 10% not cutting it much anymore, more likely 20% to 35%
• Condos are harder, and a 30%+ rate of rentals in the project may stop a mortgage application in its track

"Lenders now appear more willing to finance second homes, but borrowers must be patient, eminently qualified and strategic about their housing choices"

That last one, a direct quote, bears comment.  Appraisals have become more conservative, and the buyer really needs up-to-date comparative market analysis reports that don't just look at past sales.  First, there aren't that many.  Second, looking at the competition in the market helps a buyer to craft a better offer and end up with a better deal.  If a buyer's broker is doing their job, the market analysis will cover both recent sales and competitive listings, and I've even been known to submit this report as an exhibit with a purchase offer.  It can help the listing broker to be real with the seller about the value of their property in today's market.

Taos Real Estate

Really, this is good advice for any market, not just in Taos real estate shopping.  Realtor.com ran a short post about what to look for in shopping for condos.  The gist of the article is to carefully examine the condominium association documents, budgets and other financial information.  Just because a condo project looks healthy and well-occupied doesn't mean that this is the case.

With a single family home, you're pretty much in control of a lot of things that you can't control in a condo project.  With the pooled fees, maintenance and improvements are dependent on a properly structured budget, and condo owners that are paying their dues on time and in full.  Too many in arrears, and critical functions can be threatened...that is unless and until other owners have to increase their dues to make up the difference.

In today's more restrictive lending environment, lenders scrutinize condo projects carefully, as they lose some control as well.  They are denying loans if too many units are owned by one entity, or if more than 15% or so of owners are behind in their payments.  As a buyer broker, I don't just deliver condo docs and wait to see if you object to any of the items in them.  If you thoroughly understand them and don't need my help, great.  But, I want my clients to know that I'm ready to go over every document, and ferret out other information if necessary to make sure that the project's finances are in good order.

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Think you can't afford a home, or you don't have a down payment, so can't buy one? If your credit is good and you aren't overloaded with debt, there is a program you might qualify for. It's the USDA Rural Home Guarantee program.

I just represented a buyer in a closing on this loan program, and she didn't put a penny into the deal. That's right, no down payment. We negotiated with the seller to provide 3% toward closing, and the remainder was financed.

There are upper income limits for this program, so lower income buyers can benefit, while those making over $50k generally can't qualify. But, with home prices down in Taos right now, and interest rates low as well, this could be your opportunity to own a home with no money out of pocket.

REALTOR® Magazine-Daily News-No-Doc Loans Could Return.  Maybe the Taos real estate market will get a boost when no doc and low doc loans return.  The article at the link seems to believe that they will within the next six months.  I know that those type loans are how we self-employed used to buy our homes in many cases.

It's not as easy when you can't say to the lender "I want your money for a jumbo loan, but I don't want to tell you anything or cough up my tax returns."  I'm not sure if lenders would call those the "good old days."

Hello Everyone,

Before reporting the weekly update I want to thank all of you for your wonderful feedback and support regarding the updates!  I know Jason did a great job for us because of the feedback received at the time and I wasn’t sure how my format would be received so I truly thank you all!

It is also important to note that when you refer a client to our office, if we are unable to help the client or do our best for them, we always refer them to someone who can help. Whether or not that means sending them to someone else locally or in other NM areas depending on the specifics of the program that will best suit their needs.

TLT is Taos’ only ‘certified’ mortgage broker by the National and NM Association of Mortgage Brokers.

Rates are Still Fabulous
30 year  4.875%
15 year  4.625%
5/1        4. 25%
FHA       5.00%
Prime     3.25%

Lenders are still out up to 60 days before closing loans given the refinance rush. They have not caught up yet and boy oh boy are they scrutinizing appraisals!  I realize in the past market updates I did not note that all lenders give purchases top priority over refinances. If you are getting the feedback that your refinance is taking longer to obtain lender feedback it is most likely because the purchases that continue to make their way into the lender systems are kicking the refinance turn times back further and further. Be patient, if your brokers are providing 60 day locks on your rates you should be fine.

Appraisal HVCC update

This will probably by the last time I comment on the new HVCC regulations since I have talked about it for the past 3 or so weeks. IT is now in place as of May 1^st and all clients are required to provide a credit card number in order to place the appraisal orders. In the past we collected checks and the brokers reimbursed the appraisers from the brokers account but this is no longer do-able as it is considered a conflict of interest. If you have any questions or concerns about this feel free to email me and I will be happy to provide further information.

Obama Mortgage Payment Assistance Plan

Wow, I had no idea the type of feedback I would get about this information! You are all very welcome and remember to contact your current mortgage lender to obtain the most recent information to assist you. Let’s face it; any of us in the real estate and/or mortgage industry most likely made less income last year (if any) and therefore qualify to refinance our primary residences under this plan…take advantage of it while you can! 2% fixed interest rate for 5 years is pretty fantastic!!!!

Market Place Updates

No Stress on Mortgage Rates

According to the latest issue of HSH’s Market Trends Newsletter, “No ‘Stress’ on Mortgage Rates,” as the economy slowly pieces together the components of a recovery; mortgage rates remain relatively stable at their current historic low.

Everyone keeps scanning the horizon, hoping to see the good ship Economic Recovery that’s surely out there somewhere. There’s still no indication of just when our ship will come in, but some market watchers think they’re seeing, just maybe, the merest glimpse of that elusive vessel.

Home mortgage rates offer such a glimpse. We’d remind you that despite their ups and downs, it’s important to remember that they’re definitely in the “historic low” range. For example, the 30-year FRM, as measured by HSH’s Fixed-Rate Mortgage Indicator, settled at 5.48%, up a scant five basis points (0.05%). That all-inclusive figure averages the prices of conforming, jumbo and expanded conforming products. The 30-year conforming FRM for the week averaged 5.04%, meaning that mortgage shoppers can find some very attractive rates in their area.

Not to sound like a skipping CD, but there isn’t much reason for rates to move just yet. To be sure, next week brings us a couple of potentially market-moving indicators including import/export prices, Retail Sales, and the PPI and the CPI, but it’s not likely they’ll surprise us.”

“Maybe it’s just us, but there does seem to be a bit more optimism in the news this week. Here’s hoping it spreads.”

Fannie Mae: We need a few billion more

May 12th, 2009 Posted in News by Paul Havemann

The bleeding among the secondary market entities goes on. Fannie Mae lost another $23 billion in the first quarter of the year, and is back asking for more money:

Fannie Mae, operating under a federal conservatorship, asked the U.S. Treasury for a $19 billion capital investment and raised the possibility that its long-term survival may be dependent on continued government funding.

Fannie Mae, which took $15.2 billion in aid on March 31, cited the “unprecedented” housing market slump and government-mandated programs that are creating “conflicts in strategic and day-to-day decision making,” according to company filings today with the Securities and Exchange Commission.

The first-quarter net loss widened to $23.2 billion, or $4.09 a share, pushing Fannie Mae’s net worth below zero for the second time. The credit quality of loans and mortgage bonds that Fannie Mae owns or guarantees deteriorated amid the yearlong economic recession and as the government forced the company to help struggling homeowners refinance or modify their loans.

“Future activities that our regulators, other U.S. government agencies or Congress may request or require us to take to support the mortgage market and help borrowers may contribute to further deterioration in our results of operations and financial condition,” Fannie Mae said in the filing.

Just a few months ago, the government doubled its capital commitment for Fannie Mae and Freddie Mac to $200 billion; now we’re committed to ‘investing’ up to $400 billion into the two entities. And note well Fannie’s warning that “its long-term survival may be dependent on continued government funding” due to its obligation to pay dividends to the Treasury. In short, the money comes out of one pocket and goes into the other.

Doesn’t that sound as though Fannie (and, ostensibly, Freddie) is being forced to lose money?

U.S. Stocks Rise as Oil Climbs, Bernanke Encouraged by Banks www.bloomberg.com

May 12 (Bloomberg) -- U.S. stocks rose as higher oil prices lifted energy producers and Federal Reserve Chairman Ben S. Bernanke said efforts by banks to raise capital are “encouraging,” overshadowing concern the economy may weaken further.

ConocoPhillips and Schlumberger Ltd. gained as crude oil reached $60 a barrel for the first time since November. MBIA Inc., the largest bond insurer by outstanding guarantees, surged 7.6 percent after posting its second profit in seven quarters. Ford Motor Co. dropped 8.6 percent as the automaker said it will offer 300 million shares to the public.

The Standard & Poor’s 500 Index added 0.5 percent to 913.32 at 9:36 a.m. in New York. The Dow Jones Industrial Average gained 59.74 points, or 0.7 percent, to 8,478.51. European shares advanced, while Asian stocks declined.

“There’s a general sense that things are improving,” said James Paulsen, who helps oversee $375 billion as chief investment strategist at Wells Capital Management in Minneapolis. “The government is suggesting that banks can raise capital quite easily. Earnings reports continue to be pretty decent and the economy is probably bottoming.”

The S&P 500 last week rose 5.9 percent, erasing this year’s loss, as results from the government’s stress tests of banks reassured investors and the pace of job cuts slowed in April. The measure’s 37 percent jump from March 9 through May 8 is the most over similar spans since the 1930s.

‘The two-month rally in global equity markets has been based on expectations of a rapid economic recovery that is “extremely unlikely” to materialize, according to Nobel Prize-winning economist Paul Krugman, who spoke at a forum in Shanghai today.

Economists downgraded their projections for a recovery from the deepest U.S. recession in half a century, now seeing the jobless rate exceeding 8 percent through 2011, a Bloomberg News survey showed.

Unemployment will average 8.5 percent in 2011 after a 9.6 percent rate next year, higher than previously expected, according to the median forecast in the survey taken from May 4 to May 11. The economy may expand 2.8 percent in 2011, less than estimated last month, after a 1.9 percent rise in 2010.

Citigroup rose 1.6 percent to $3.92. Banks, especially those with “trading and investment banking businesses,” should keep monitoring “operational, liquidity and reputational risks,” which weren’t addressed by the exam concluded last week, Bernanke said in a speech yesterday at a Fed conference in Jekyll Island, Georgia. The Fed-led tests of the 19 largest U.S. banks showed last week that 10 firms need to raise a total of $74.6 billion in capital.

Bank of America climbed 2.1 percent to $13.21. The biggest U.S. lender by assets sold a 5.8 percent stake in China Construction Bank Corp. for about $7.3 billion, said two people with knowledge of the matter. The sale brings Bank of America closer to the $33.9 billion regulators say it needs to raise following stress tests. Bank of America spokesman Robert Stickler declined to comment.

MBIA added 7.6 percent to $7.49. The first-quarter net profit of $696.7 million, or $3.34 a share, compared with a loss of $2.4 billion, or $12.92 a share, a year earlier, the company said.

ConocoPhillips, the second-biggest U.S. refiner, gained 2 percent to $46.04. Schlumberger, the world’s largest oilfield- services provider, rose 1.5 percent to $55.60.

Ford sank 8.6 percent to $5.56. The second-largest U.S. automaker said it will issue 300 million shares of common stock in a public offering and use at least some of the money for a union-run medical trust.

The shares will price today, according to Bloomberg data. Ford had 2.8 billion shares outstanding as of May 1, so the new stock would be an 11 percent increase and raise more than $1.8 billion at yesterday’s closing price.

Advanced Micro Devices Inc. climbed 3.8 percent to $4.38. The chipmaker had 22.3 percent of the market for personal- computer processors in the first quarter, up 4.6 percentage points, while larger rival Intel Corp. lost 4.7 percentage points to capture 77.3 percent, researcher IDC said.

The S&P 500 is up about 1.3 percent in 2009 after tumbling 38 percent last year, its worst annual tumble since the Great Depression.

“We’re in a bottom formation,” said Gregor Mast, an equity strategist at Clariden Leu in Zurich, which oversees about $88 billion. “Economic data and earnings are less bad and sentiment has improved but that’s not enough for a lasting upward trend. We’ll see backlashes.”

Summary

While news seems to be slightly better in some economic sectors, the true bottom line is trying to plan your business life in a proactive manner still seems almost impossible. The name of the game for 2008 and now it seems 2009 is definitely ‘learn to go with the flow and make the best of it.”

Thank you for your time.

Sincerely,
Elisabeth Guillemin

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	TLT is Taos’ only ‘certified’ mortgage broker by the National and NM Association of Mortgage Brokers. Rates are GREAT! 30 year  4. 75% 15 year  4.375% 5/1         4. 375% FHA         5.00% Prime      3.25% As you can see the rates are just a smidge better than last week. With business having been so slow in the past year or so, lenders are finding themselves caught short with the downsizing of staff. Now that we have a refinance boom lenders are hiring new underwriters to help handle the work load. I don’t envy the job of the underwriter in today’s every changing market and hope they are well paid for their jobs. This past Friday I read through a lenders 6 page updated summary for the new Freddie Mac (LP) guideline changes and today new additional changes have been posted. It is no wonder turn times for loans in the system is getting further and further out. Last week I reported 10 day turn time on refinances but is now 15-20 days. 30 day locks are not being offered by lenders unless your loan has already been in the system and approved by an underwriter. This leaves us in the mortgage industry in a quandary with regards to rates and when to lock. In the good old days we could submit loans with a 7 day or less turn time and not worry about assuring our borrowers rates. Today, with turn time out so far, the safest best for your client is to be certain they are locked the day the rate is quoted. If they have not made a definite decision with regards to their purchases AND they want a competitive rate, you can be sure we will urge them to lock and sign ASAP! FHA News With rates so low it is a good time to take advantage of FHA’s 203 K program for primary residences! With the 203(k) loan program, borrowers can purchase or refinance their home and include all the costs necessary in order to rehabilitate, improve and/or make repairs all within a single loan. This program can also help you to expand homeownership opportunities while revitalizing the communities you serve simultaneously. Additionally, with the 203(k) program, you can: – Increase loan origination volume – Expand your market reach – Help borrowers find affordable financing in order to obtain the dream of home ownership – USDA Guaranteed Rural Housing (GRH) USDA Guaranteed Rural Housing (GRH) provides guaranteed loans for new or existing single family homes in rural areas. · Rural areas include towns, cities or places with populations of 10,000 or less, and towns and cities not part of an MSA with populations between 10,000 and below 20,000 (25,000 if rural in character, not part of an MSA and designated as rural prior to 10-1-90). · Only 30 year fixed for Primary residence is allowed. Rates are based on FMHA pricing. Appraisal News This week a large nationwide conference for the HVCC changes will take place and we will be participating. I will have more news about HVCC at the end of the week for everyone. Lenders are setting their own rules about what they will or will not accept. I have one lender that will accept any appraisal that is dated prior to May 1st whether or not the file is in their pipeline and another lender who will not accept any appraisal that hasn’t been submitted to them by May 1st. Go figure….it’s no wonder we are becoming the queens and/or kings of change! Recent News NEW YORK (CNNMoney.com) -- U.S. stocks were poised for a lower start Monday, as investors turned their attention to a slew of merger and earnings news. At 8:39 a.m. ET, Dow Jones industrial average, Standard & Poor's 500 and Nasdaq 100 futures were all lower. Futures measure current index values against perceived future performance and give an indication of how markets may open when trading begins in New York. Stocks rallied Friday marking Wall Street's sixth straight week of gains. But the rally could be tested this week by jitters about quarterly results. "Markets have been up six weeks in a row and people are a little nervous coming into a big earnings week," said Todd Leone, head trader at Cowen & Co. " Earnings: With an estimated 10% of the S&P 500 having reported results so far, profits are on track to have shrunk 37.4% from a year ago, according to the latest from Thomson Reuters. Before the bell, Bank of America reported earnings of 44 cents a share, considerably better than analysts expected. Drug maker Eli Lilly's earnings also beat estimates. Deals: Tech giant Oracle announced it will buy Sun Microsystems (JAVA)in a deal worth $7.4 billion. PepsiCo offered $6 billion to buy out shareholders of its two largest bottlers, Pepsi Bottling Group and Pepsi Americas. The soft drink maker also announced better-than-expected quarterly earnings. World markets: Stocks in Asia managed to end mostly in positive territory. Japan's Nikkei edged higher and the Hang Seng in Hong Kong rose nearly 1%. European markets, meanwhile, tumbled in midday trading. Oil and money: Oil prices tumbled $2.72 a barrel to $47.61. The dollar was higher versus the Euro and the British pound, but lower against the yen. Summary With rates this low it is a good time to refinance and/ or cash out SOME equity to payoff higher interest debts, we can also help you obtain a home equity line of credit. Keep Taos Lending Team in mind when looking at properties that require “unique” financing options for your borrower. You are welcome to contact us at 575.751.4641 Steve Johnson  steve@taoslendingteam.com Lisa Levy lisa@taoslendingteam.com Jean Trujillo jean@taoslendingteam.com Elisabeth Guillemin elisabeth@taoslendingteam.com Thank you for your time and consideration. Sincerely, Elisabeth Guillemin

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TLT is Taos’ only ‘certified’ mortgage broker by the National and NM Association of Mortgage Brokers.

Rates are GREAT!

30 year  4.875%

15 year  4.375%

5/1         4. 625%

Rates continue to fluctuate as have our markets. Rates have remained steady between 5.25% and 4.625%, refinances are up and lender turn times are now up to 10 days out for refinance approvals.

Just because rates are low doesn’t mean it is any easier getting a loan to close. Lenders are still scrutinizing closely all aspects of our loans and while we are closing loans, the process is taking longer than we like. Patience and open communication helps to minimize the frustrations and keep us positive. Money is beginning to move in the marketplace, albeit slowly.

Appraisal Updates

The Federal Housing Finance Agency approved the Home Valuation Code of Conduct (HVCC), which becomes effective May 1, 2009.  This means that all appraisals must go through an Appraisal Management Company (AMC).  The purpose of the code is to improve the reliability of home appraisals and restore appraiser independence.  The goal is for all parties involved in the mortgage process to receive independent and fair property valuations.

The reasons for the approval of HVCC is due to the amount of fraudulent property evaluations in the past 18 months or so which have contributed in part to the mortgage lending crisis, over inflated real estate values and our economic downturn.

How does the HVCC affect us locally in Taos? Greatly, we will no longer be able to choose the appraiser, which is not the best news. We at TLT are working to have all local appraisers sign up with a variety of agencies so we can enlarge the scope of approved local appraisers and minimize problems.

Recent News

Article from CNN.com:

Bernanke sees 'signs' decline is easing

Federal Reserve chief says he 'tentative signs' that the economy's slide is slowing. Full recovery will require stabilization of banks.

Last Updated: April 14, 2009: 9:39 AM ET

NEW YORK (CNNMoney.com) -- Federal Reserve Chairman Ben Bernanke said Tuesday he sees "tentative signs" that the economy's dramatic decline is easing, but that full recovery won't come until the financial system is stabilized.

"Recently we have seen tentative signs that the sharp decline in economic activity may be slowing," Bernanke said in prepared remarks for a speech he is set to give at 1:30 p.m. in Atlanta.

Bernanke said "a leveling out of economic activity is the first step toward recovery," adding that "we will not have a sustainable recovery without a stabilization of our financial system and credit markets."

Among the positive indicators Bernanke mentioned were recent upticks in home sales and new home construction. He also pointed to improvements in consumer spending, notably sales of new vehicles and existing homes unexpectedly rose in February, after several months of declines, as sellers slashed prices and mortgage rates fell to historic lows. Also in February, initial construction of new homes and applications for building permits both rose unexpectedly.

"Certainly, the housing market remains depressed, but lower interest rates and house prices are making houses more affordable," Bernanke said.

Government figures released Tuesday showed retail sales fell 1.1% in March, after a more modest 0.3% decline the month before. Economists surveyed by Briefing.com had forecast retail sales to increase 0.3% last month.

Auto sales meanwhile, were better than expected in March. While overall sales fell to a 34-year low last month, all the major automakers posted gains from January and February, and all but Toyota topped Edmunds.com's sales forecasts.

Summary

Patience, patience, patience, currently tops location, location, location. Lender guidelines continue to change daily as do the markets, managing change (or is that an oxymoron? J) is how we continue to close our loans.

Contact us at TLT if you have any questions.

Thank you for your time.

Sincerely,

Elisabeth Guillemin

President