The portal is still being constructed but to help in the transition, lenders should begin using the UCDP starting June 27. This process will be mandatory starting March 19, 2012 with conventional loan appraisal report forms to be sent to Fannie Mae having to be sent through the portal before the delivery date if:

1. The loan application is dated on or after Dec 1, 2011 &
2. An appraisal report is required

Lenders and Agents will be able to enter the portal one of two ways: 

• An Web-based interface : Easy-to-use! This will let users upload XML or PDF files into the portal. Lenders may prefer appraisal forms from appraisers to be in XML format.
• Vendor-provided solutions that offer an integrated system interface. Fannie Mae and Freddie Mac already have a list of technology vendors that will be providing a vendor solution with an integrated system interface for UCDP.  This list will be updated regularly and is available Here.

Preparation:

To integrate this new web based procedure into your routine, an overview and all details of how to use it as well as Q’s & A’s is available on UCDP by Fannie Mae. This resource page is located Here as well as a PDf version of its overview. This online information center also has resources on job training and aid and a joint GSE call center will soon be available as well.  In the meantime lenders should begin to figure out:

• How they will access and submit files to the portal
• Who in the office will be responsible for registering for this program
• Who is the office will be the administrator who is in charge of creating user access and company profile
• Giving needed information about UCDP to everyone in the appraisal process. Lenders will be able to give permission to an Agent to submit a file for them.

* Keep in mind: The Lender Administrator has to be the same person if your business sends your loans to both Fannie Mae and Freddie Mac. Fannie and Freddie will have individual registrations and so this person will need to enroll with both.

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Interest Rates are Low helping Mortgages

The housing market started to regain stability in the past two months, after months of sales being in the toilet. Mortgage rates are at extreme lows, which are helping, although unemployment is predicted to remain high in 2011 (above 9% for the third year in a row – the last time this occurred was 1939 to 1941) which will aid in the low demand for houses.

In July, The National Association of Realtors’ index of pending home resale had a 4.5% gain in July and a 4.3% gain in August. However, a year ago these rates were up 18.4%. In the same month (August), three of four regions had gains in contract signings. The South had a 6.7% gain, the West had a 6.4% gain, and the Midwest had a 2.1% gain.

Previously owned homes make up around 90% of the market and in August these sales rose to a rate of 4.13 million.

West Chester Moody’s Analytics Senior economist Aaron Smith described the situation as a stabilizing improvement with “a long way to go”.  He believes the labor market is going to be the most important factor, which is identical to what other experts are forecasting.

Economy

 

Unemployment Continuing its High is Hurting the Market

Unemployment impairs home sales as well as aids housing foreclosures. In August foreclosures hit a record high for the third time within five months. Predictions are that if this problem of joblessness is not dealt with, no market can fully flourish.

Because of this, policy makers of the Federal Reserve may try to counteract with more stimulus.

Progression and prevention of deflation in the economy will be a matter of fiscal relief, believes William Dudley, the President of the Fed Bank of New York.

Very Low Mortgage Rates

Freddie Mac has announced that ending September, a 30-year fixed mortgage average rate had been recorded at 4.32%, a super low. Freddie’s Chief Economist, Lawrence Yun, stated, “Attractive affordability conditions from very low mortgage interest rates appear to be bringing buyers back to the market”.

Homebuyer tax credit with a maximum of $8,000 were required to be signed on April 30 and closed by September 30 so many closed near the beginning of summer.

Solutions Ahead

This horrible economic year is ending on a steady path. However this path is at a low incline.  A huge aid to help reclaim the housing market’s health will be when unemployment finally decreases. Until then, it will only continue to get better at a slow rate.

The Long Haul Ahead

Another idea for growth from William Dudley (Fed Bank of New York) is that sustaining home and stock values, generating mortgages for home buying and refinancing to be less expensive, and decreasing the cost of assets for business can ultimately help our economic situation by lowering long-term interest rates.  This can be done by refreshing purchases of Treasuries or mortgage debt.

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Instantly Detect Changes Between Borrower’s Origination and Pre-Closing Credit Reports By Utilizing CreditCOMPARE.

Credit bureaus are now offering CreditCompare. Compare two reports to comply with FannieMae’s LQI requirement to identify undisclosed liabilities. Identifies the variances, so you don’t have to!

CreditCOMPARE  Identifies Changes In: 

• Borrowers Identification Information

•  Credit Scores (if ordered on the Pre-closing Report)

•  Balances, Tradelines, Payments and Public Records

•  NEW Tradelines and Inquiries

•  Credit Utilization

 

 

 

  

 

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On or around October 21, 2010  Federal Housing Finance Agency (FHFA), Freddie Mac and Fannie Mae will will have created and executed new appraiser independence requirements to follow the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).  Until the change is released in the upcoming Selling Guide announcement, existing  provisions of the HVCC will still apply.

The Change

The revised requirements will continue to help us ensure that the highest standard of appraisal reliability and appraiser independence are retained. It will also maintain the spirit and intent of HVCC, and continue to provide important protections for mortgage investors, home buyers, and the housing market.

During this process, Freddie Mac has been recieving information and other valuable input from key industry participants.

For more information, visit the Home Valuation Code of Conduct Web pages on FreddieMac.com.

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Freddie Mac Changing LP

LP Changes

Loan Prospector has updated it’s automated underwriting engine to accept only ratios to 50.33% of a client’s income, when qualifying for a loan.  Previous to the current announcement, Freddie Mac would allow a 55% of a client’s income to pay monthly obligations.  The announcement, from Freddie Mac, is another example of the changes in the lending industry, and the more stringent guideline requirement that the industry in going through.

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St. John discussed the reason banks are having more difficulty closing loans, these days.  He also talked about reasons why banks are slowly releasing their foreclosure inventory, as opposed to releasing it all at once.  Another key subject he talked about was where the lending and real estate industry is expected to go, through the remainder of 2010 and even into 2011.

Some of the positive points, brought up by St. John, were that even though the United States Government would stop buying Mortgage-Backed Securities, at the end of March, Freddie Mac felt as though there were many investors, sitting on the sideline, waiting to get into the market, and purchase these investments.  Therefore, even though rates are expected to move upwardly, resulting from this buying halt, it shouldn’t be too worrisome; as these investors haven’t been on the sidelines for years, and now we’re seeing them start to sit on the sidelines.  Another positive point was that Mortgage Insurance Companies are starting to become more flexible with their underwriting guidelines, and even have relaxed their loan amounts, compared to real estate prices, in Santa Cruz County.  This could just be a precursor to the rest of California.  ”It’s been difficult to obtain conventional financing with less than 10% Down (excluding FHA loans), until this recent development, in Santa Cruz.  It’s quite promising,” stated Salas.

St. John noted the lending industry saw about $3.5 Billion in loans, in 2009, while the industry expects anywhere from $1.3 – $1.6 Billion for 2010.  Eighty percent of these loans will be first-time home buyers.  ”What’s interesting about the eighty percent figure,” stated Salas, “is that seventy percent, of that eighty percent, is categorized as ‘first-time home buyers,’ because the industry’s definition of ‘first-time’ is somebody who hasn’t owned a home in the last three years.  So, people who owned a home, then lost it during the mortgage credit crisis, will be eligible to purchase another home, with only 3.5% down (FHA).  It’s an interesting situation, as these buyers were of the old-style qualification standards, and they’ll have to be ready to understand that loan qualifications have changed.  But, we’re ready to educate them.”

Scott St. John indicated, “financing a home, using FHA, will become more difficult, unless using a HUD Approved FHA Direct Lender, like Access Real Estate Lending.”  As one of the areas premier mortgage bankers, Access has financed over $665 Million in loans, in just ten short years.  ”We’re excited about the future, about the Chico Market, and that Scott St. John would come to our wonderful community, enjoy Sierra Nevada Brewing Company’s Big Room, and say such wonderful compliments about Access Real Estate Lending.  We’re quite honored.”

The Big Room At Sierra Nevada Brewing Company

YOU DON’T WANT TO MISS THIS EVENT!!!

Scott St. John will be speaking at The Big Room At Sierra Nevada TODAY!!! Scott is a 3rd-Term Governing Board Member of Freddie Mac.  You’ll have an opportunity to inquire into the expected economic future of the United States, Real Estate and its REO future, and what’s happening behind the scenes that is making closing loans less timely and more difficult, these days.   REGISTER AT THE CHICO OR PARADISE BOARD OFFICES.  $10 includes appetizers. $15.00 AT THE DOOR!

We’ve Settled Down A Bit

Credit market participants are shaking their heads, and trying to recover form a horrible auction week for U.S. Treasuries.  Is the writing on the wall, here, too?  Remember, that without the United States’ Government purchasing Mortgage-Backed Securities (MBS), that’s a major buyer out there, that has left the building, so to speak.  And without a major buyer, in order to attract other investors, you have to offer a greater rate of return…and therefore, greater interest rates.  We lost 88 basis points, alone, on Wednesday.  That’s .875% Points on a loan.  UGLY!  Today, however, things are looking slightly better.  We’ve managed to creep up about 30 basis points.  That equates to approximately .25% Points on a long.  What have I been saying?  Rates will increase once the government stops purchasing MBS, and I suspected anywhere from .25% to .5% in RATE, not Points.

GDP

The Commerce Department reported that Gross Domestic Product (a statistical measure of the total market value of all final goods and services produced in the country) expanded at a 5.6% annual rate, instead of the 5.9% pace estimated earlier.

Non-Farm Payroll Figures

The big news will be the March Non-Farm Payroll figures, that will be release this next Friday.  This will be a touch call.  The expected number is 180,000 new jobs, and the unemployment rate to remain close to 9.7%.  Any move in any other direction could have an effect on rates, however, if unemployment moves down, and the new job creation number moves closer to the 200,000 range…it could have a real negative impact on rates.

I'd Float Into The Day, As We Somewhat Recovered

Locking Advice

It’s probably a good idea to lock your pipeline.  Particularly since the government census workers will be considered in this Friday’s employment numbers.  So, I think the risk is too great!  With the Market settling now, I’d float until we see signs of market worsening.  That could happen any time, next week.

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The Big Room At Sierra Nevada Brewing Company

YOU DON’T WANT TO MISS THIS EVENT!!!

Scott St. John will be speaking at The Big Room At Sierra Nevada Friday, March 26, 2010. Scott is a 3rd-Term Governing Board Member of Freddie Mac.  You’ll have an opportunity to inquire into the expected economic future of the United States, Real Estate and its REO future, and what’s happening behind the scenes that is making closing loans to less timely and more difficult, these days.   REGISTER AT THE CHICO OR PARADISE BOARD OFFICES.  $10 includes appetizers. $15.00 AT THE DOOR!

Appetizers Served: Artichoke Dip w/Crostini and Sierra Nevada/Chico State Farm trio of sausages with pale ale sauerkraut and SNBC’s trio of award-winning mustards, to be served to nice people, at this event!!!!!

Rates Skyrocket!

Well…Yesterday…You know what…hit the fan!  We were busy locking…all morning long…before rates SKYROCKETED!  We lost 88 basis points, throughout the day, however, managed to lock loans when we had only lost 28.  That’s about 0.5% Point Savings on each loan we locked!

What Rates Skyrocketed!

What have I been saying?  When the Fed runs out of their $1.25 Trillion Government Sponsored Mortgage-Backed Security (MBS) Purchase Program…what’s going to happen?  Higher Rates!  Well, the market woke up yesterday, realizing that there’s only one week left in March…not to mention that the Treasury Auctions have not fared too well, this week.  Without the government purchasing MBS to keep rates low, where do you think they’ll go?  Also…there is another auction of $32 Billion of 7-Year Treasuries…if that doesn’t fare well…expect even higher rates!

Initial Jobless Claims

They crept in at a weekly claim of 442,000 while the market expected 450,000.  Be prepared for Friday’s Unemployment figures!  They’ll probably come in pretty strongly, due to better weather around the country, and hiring people for the government census.

Greece VI, (I Believe)

Germany has agreed to help bail out Greece.  This is giving some security to the European Union, and helping boost Stocks in the U.S.

Get Used To Seeing This Picture For Quite Some Time

Locking Advice

Lock, like you’ve never locked before.  Protect your clients and yourselves.  I don’t thing the 7-Year Treasury Auction will fare well, as the others did not and the longer the term, the harder to gain a return, when you factor in inflation.  All signs point to locking!

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YOU DON’T WANT TO MISS THIS EVENT!!!Scott St. John will be speaking at The Big Room At Sierra Nevada The , Friday, March 26, 2010.  Scott is a 3rd-Term Governing Board Member of Freddie Mac.  You’ll have an opportunity to inquire into expected economic future of the United States, Real Estate and its REO future, and what’s happening behind the scenes that is making closing loans to more timely and difficult, these days.   REGISTER AT THE CHICO OR PARADISE BOARD OFFICES.  $10 includes appetizers.  $15.00 AT THE DOOR!

A Hint On Locking Advice

We managed to climb above the 100-Day Moving Average, yesterday.  This is a huge pyschological step, as the 100-Day has been acting as a layer of resistance for quite some time.  If we can manage to stay above this level, it would make sence to float long escrows, and not lock for longer periods of time, as it would save clients a lot of money. 

Housing Numbers

5.02 Million Units were sold in the Existing Home Sales Category.  That was just in line with where we expected to be, however, the grimmer figures were the exiting inventory numbers.  These spiked to an 8.6 Month level.  Higher than the 7.8 Months reported last month, and close the the 9.2 Months reported last August.  Perhaps the Tax Credit, coming to an end, will help stave off these numbers for March and April.  We’ll have to see. 

Fannie Mae and Freddie Mac’s Future? 

Treasury Secretary Timothy Geithner is speaking to the House of Representatives Financial Services Committee, today.  He’s discussing the reason behind the government take-over of Fannie Mae and Freddie Mac.  He’s expected to comment that had the government not taken over these entities and pumped $127 Billion into the groups, the housing industry would have CRASHED…harder than it already has.  Republicans are looking to privatize the GSE’s, as soon as possible.  While this would be healthy for competition, of course, their idea is that the government can spend too much and not run the entities appropriately.  However, keep in mind…that’s just how we got into this mess, in the first place.  So, a slow transition, is what I believe would be more beneficial to the American People.  Keep in mind…these GSE’s are simply in receivorship, and will be released back to a private status once they’re more healthy.  “AFter reform, the GSE’s will not exist in the same format as the did in the past,” Geithner said.  “Private gains will no longer be subsidized by public losses, capital and underwriting standards will be appropriate, consumer protection will be strengthened, and exxcessive risk-taking will be restrained,”  he pledged.  The public will have an opportunity to comment on these suggestions by April 15, 2010. 

We Are Continuing To Float Into The Day

Locking Advice

As mentioned above…we may as well float, until we see signs that we’ve going to move under the 100-Day Moving Average. 

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