Mortgage Loans

Mortgage Loans

Liquidity Crisis Wreaks Havoc With Delaware Mortgage Market

John Thomas August 7, 2007

Following the well-publicized subprime crisis earlier in the year, a major disruption in the credit markets broke out on an unprecedented and historic scale this week on Wall Street. This caused major write-downs of loan and security portfolios and brought down one of the top 10 Prime and Alt-A lenders in the country, American Home Mortgage, which stopped funding $800 million in loans beginning Monday and left thousands of home buyers stranded at the closing table with their home purchases. American Home Mortgage was the in house lender for Keller Williams Realty in Delaware and this whole situation has left many Keller Williams clients without loans. This illustrates the value of using a broker who would have been able to flip a loan that was with American Home Mortgage to another lender that is taking American Home Mortgage loans that didn’t fund or close but were approved. Keep Reading...

Negative Amortization – What is it?

John Thomas August 3, 2007

Negative Amortization
Amortization is the repayment of a loan by making systematic payments over a set time period which are applied to the combined balance of the principal and interest for that loan amount. Therefore, negative amortization occurs when the payment is less than the required interest that has accrued on the loan for that month.

Summary:
Few lenders offer negative amortization loans today. Those that do have annual payment caps and lifetime interest rate caps for steady control on required payments over time. Keep Reading...

Delaware Mortgage Loans with American Brokers Conduit won’t fund!

John Thomas August 3, 2007

American Brokers Conduit sent out the word on Thursday that they were officially closed for good. ABC sent out e-mails to its brokers and posted a message on its website which shut down.  American Brokers Conduit lost its credit lines so therefore lost its ability to fund loans. The company wasn’t in trouble but when it lost its ability to fund loans and couldn’t find an alternative source of money it had to close its doors.  Several lenders have tried to take the loans that could not fund with ABC. Keep Reading...

Financial News for July 30th, 2007

John Thomas August 1, 2007

The economy grew at a 3.4% pace in the second quarter, a big improvement over the 0.6% showing in the first three months of 2007 and better than the 3.2% growth rate economists were expecting, the Commerce Department reported July 27. Also in the second quarter, core prices — excluding food and energy — rose at a rate of just 1.4%, sharply down from a 2.4% pace in the first quarter and the smallest increase in four years.

Meanwhile, consumer sentiment registered 90.4 in July, a shade below the median forecast of 91.2, but well ahead of June’s reading of 85.3, a 10-month low. The gain was tied to consumers’ favorable outlook about the economy, particularly regarding future employment and income prospects, the Reuters/University of Michigan Survey of Consumers said July 27. Keep Reading...

More Mortgagage Lenders Close Doors

John Thomas August 1, 2007

More Lenders stop funding new loans and look to be closing their doors.  Fieldstone Mortgage stopped funding new loans on July 25th, 2007.  Any loans that haven’t already funded by July 25th were dead and would not fund.

American Brokers Conduit stopped funding new loans on July 31st because they could no longer obtain credit to fund loans.  ABC hasn’t announced they are going under but the outlook is not good.

ResMae also stopped funding new loans.  Entrust Mortgage is no longer funding new loans. Keep Reading...

Delaware Home Improvements Turn Average Delaware Homes into Dreams Come True

John Thomas July 26, 2007

Delaware Home Improvements Turn Average Delaware Homes into Dream Come True

If you’re thinking about taking out a home improvement loan in Delaware, there are several options to consider. First and foremost, your mortgage consultant needs to know why you want a home improvement loan. Here are some factors to take into consideration.

  • How long have you been in the home?
  • Will the improvements increase the property value?
  • Are you making improvements to increase energy efficiency?
  • Will improvements be made in one fell swoop, or in stages?
  • What is the current outstanding balance on your mortgage?
  • What is the appraised value of the home?
  • How much will the improvements cost?
  • What improvements will be tax deductible?
  • Do you have other revolving debt that you would like to pay off at the same time?
  • Are you making improvements because you plan to sell the property?
The New Tract Home Blues

Buyers of newly-built homes in Delaware are often tapped out after making the initial down payment and closing costs, including upgrades to amenities and the inevitable need for new furniture. Shortly thereafter, they realize they’d like to make additional improvements to really have the home of their dreams. Keep Reading...

FHA Loans – Mortgage Insurance

John Thomas July 26, 2007 Tags: ,

FHA Loans – FHA Mortgage Insurance

FHA does not fund home loans directly; rather, it provides a guarantee to the mortgage lender against default. There are two separate fees that HUD collects to provide a level of guarantee coverage to the lender:

  1. Up-front mortgage insurance premiums (UFMIP).
  2. Monthly renewal mortgage insurance (Monthly MI).

The up-front mortgage insurance premium, if required, will be 1.75% of the base loan amount. This can be added directly on top of the base loan amount to determine the total loan amount, regardless of initial loan amount or appraised value. MI can always be added to the maximum base mortgage amount.

Monthly mortgage insurance premiums for home loans closed after January 1, 2001, are refundable through the 5th year of the loan based on certain percentage increments. For example, if a borrower sells or refinances after having the property or the loan for 36 months, the borrower is entitled to a partial refund of the original FHA up-front mortgage insurance premiums.
The annual renewal premium, also referred to as the mutual mortgage insurance premium in the HUD mortgage insurance premium policy, is 0.85% per year divided by 12. This is included in the borrower’s monthly payment. Keep Reading...

Monthly Housing Report for June 2007 Released

John Thomas July 25, 2007 Tags:

Monthly Housing Report for June 2007

Existing Home Sales for June 2007 were reported at 5.75 Million units, which was less than the 5.90 Million expected.  But there was some good news within the report – the median home sales price increased by 0.3% to $230,100 representing the first year over year price increase in 11 months.  Additionally, the monthly sales inventory dropped to a level of 8.8 months from the prior month’s reading of 8.9 months. The monthly sales inventory is a measure of how many houses are for sale currently measured in how many months it would take to sell all of the houses currently for sale.  All in all the report suggests the housing market is stabilizing and isn’t as dismal as the media portrays. Keep Reading...