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mvalle99
38 Posts |
 Posted - 05/16/2008 : 10:46:19 AM
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Fannie Mae just announce that they are reducing down payment required in declining markets to 3-5%.
http://www.fanniemae.com/newsreleases/2008/4370.jhtml;jsessionid=QZMTEXOAUTD1ZJ2FECISFGA?p=Media&s=News+Releases
Big in California!
Mario Valle
Valle Mortgage |
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kalee3415
193 Posts |
Posted - 05/16/2008 : 11:01:52 AM
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Yes but are the MI companies on board? I suspect it is an attempt to look good knowing they will never have these loans due to MI restrictions. With the MI restrictions, Fannie can come out with all kinds of claims knowing good and well they will never have to bear any risk. I say they are just blowing smoke up the media's a**
quote:
Originally posted by mvalle99
Fannie Mae just announce that they are reducing down payment required in declining markets to 3-5%.
http://www.fanniemae.com/newsreleases/2008/4370.jhtml;jsessionid=QZMTEXOAUTD1ZJ2FECISFGA?p=Media&s=News+Releases
Big in California!
Mario Valle
Valle Mortgage
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mvalle99
38 Posts |
Posted - 05/16/2008 : 1:06:54 PM
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MI Companies are doing 95% LTV's right now.
Inj California, I can only do 92% on Home Possible and MyCommunity right now. 95% is better.
I am thinking that MI companies should come on board with 97%.
Thanks
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Captain Mortgage
1745 Posts |
Posted - 05/16/2008 : 1:29:53 PM
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| I have a loan closing next week with 5% down in Riverside county. Lender approved it, MGIC approved it. Just waiting for docs now. |
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smoothlid
419 Posts |
Posted - 05/16/2008 : 2:59:13 PM
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It's all about the FICO. This will help all 680-700+ low down, sub 45DTI, full doc buyers.
The rest still need FHA.
it's sad but 1st thing I thought of was big deal, no PMI avail for most.
I have 4-5 Approve/eligibles right now I can't get PMI for. |
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mvalle99
38 Posts |
Posted - 05/16/2008 : 3:17:24 PM
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Jeff,
What is the LTV? |
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evperry
94 Posts |
Posted - 05/16/2008 : 3:32:43 PM
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| so you guys think the min fico would be 680 in the high ltv? i was thiking / hoping more along the lines of 660 with the new 7.0 on the way. |
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d_damiano
551 Posts |
Posted - 05/16/2008 : 3:41:42 PM
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Paulson and the fed are going to have to lend some cheap money to the banks, who are going to need to find a creative third party conduit like huge shopping centers owners or very big building owners and give them really cheap loans and have the owners of those companies use the cheap borrowd money to buy cheaper stocks in the Private Mortgage Insurance companies to prop them up.
Unless anyone else has a better way to get the Private Mortgage Insurance companies some capital?
They can't get it directly from the Fed and it looks really dumb for the banks to invest in the companies insuring them...they might as well self insure.
hmmm...now maybe thats what we need the laws and regulations on private mortgage insurance being relaxed.
That should push the nightmare out past the election at least.
The only draw back is the dollar is worth less and food and gas prices go up, which for me is ok because I can at least afford the bump because I'm selling more loans and houses.
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d_damiano
551 Posts |
Posted - 05/16/2008 : 3:46:40 PM
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Of course the other way to solve the problem is just have the seller take the hit by buying an owners alliance membership from the potential home buyer and let the buyer earn a sales commission that they use for down payment.
Lets see, seller gets a real product and if they use it their money back or a profit, buyer gets a job and a nice commission, gov't get's the income tax, property values stop going down.
Lets see, we sell houses, we create jobs, we grow the tax base, and property vales get maintained or grow.
hmm no that won't work it makes too much sense. |
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mvalle99
38 Posts |
Posted - 05/16/2008 : 3:50:18 PM
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| Doing MI like FHA is an option. |
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d_damiano
551 Posts |
Posted - 05/16/2008 : 9:31:03 PM
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quote:
Originally posted by mvalle99
Doing MI like FHA is an option.
Wouldn't that be the ultimate irony.
The PMI companies pay Bush with campaign contributions to eliminate DPA's therby eliminating the only FHA sales force that kept them going during the sub prime years.
HUD lies about the numbers and still they can't kill off DPA's, Subprime secondary markets crash, and now FHA picks up marketshare and the gov't has to step in to supply Mortgage Insurance for conventional loans.
And that kills off Private Mortgage Insurance companies...wow won't happen but an interesting thought if the dems win in November. |
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dkendall1979
10284 Posts |
Posted - 05/16/2008 : 9:44:15 PM
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| Why would you put a client in a conforming loan at 95% LTV with a large PMI payment when you could put that same client in an FHA loan with a lower MI payment and rate? |
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peter
4613 Posts |
Posted - 05/16/2008 : 10:05:23 PM
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dkendall1979 wrote:
"Why would you put a client in a conforming loan at 95% LTV with a large PMI payment when you could put that same client in an FHA loan with a lower MI payment and rate?"
Because in a conventional conforming loan, you can run DU or LP and get approved
at a higher DITI than with FHA. Also, in conventional DU or LP with Fannie or
Freddie, the Verification of Employment is acceptable in lieu of paystubs and W-2s
for wage earners while FHA loans will not, or if it does the lender will not accept it.
There are other underwriting differences such as mortgage lates, title seasoning, etc.
that are the differentiation between conveitonal and FHA loans. One important
difference is that regardless of the low LTV, you are stuck with MI if you have
an FHA loan while in a conventional loan you can have the PMI removed after you
have 80% LTV or less.
If and when the secondary market for piggyback purchase money 2nds is back to life
and you can get 95% cltv loan, then the 80/15/5 could come back to replace the
MI or PMI. Fannie & Freddie should start a pool to invest in the 2nd loan market,
and this would provide the homebuyer an option to MI or PMI.
Peter |
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mvalle99
38 Posts |
Posted - 05/16/2008 : 10:50:56 PM
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Peter,
Well said. |
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d_damiano
551 Posts |
Posted - 05/16/2008 : 10:56:59 PM
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quote:
Originally posted by dkendall1979
Why would you put a client in a conforming loan at 95% LTV with a large PMI payment when you could put that same client in an FHA loan with a lower MI payment and rate?
David here are three more reasons in addition to Peters thoughts:
1. Non warrantable condos
2. Over the FHA loan limit
3. Investment property (BTW 1 out of 3 home sales that's right 33% of the market is vacation, second and investment homes) |
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akaagassi
138 Posts |
Posted - 05/17/2008 : 08:32:48 AM
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I'm a little ignorant here...
2 things:
I thought MI was required to be on for at least 5 years on FHA???
I thought regardless of conventional or FHA, once below 80% a borrower can have it removed???
Am I missing something???
quote:
Originally posted by peter
One important difference is that regardless of the low LTV, you are stuck with MI if you have an FHA loan while in a conventional loan you can have the PMI removed after you
have 80% LTV or less.
Peter
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rtrefflich
3414 Posts |
Posted - 05/17/2008 : 08:38:18 AM
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On FHA I believe that you have to keep it for five years and regardless of the LTV you need to have it.
In running some scenarios with someone who does FHA they told me that even if we put down 20% they still need the PMI and it stays on regardless for five years.
quote:
Originally posted by akaagassi
I'm a little ignorant here...
2 things:
I thought MI was required to be on for at least 5 years on FHA???
I thought regardless of conventional or FHA, once below 80% a borrower can have it removed???
Am I missing something???
quote:
Originally posted by peter
One important difference is that regardless of the low LTV, you are stuck with MI if you have an FHA loan while in a conventional loan you can have the PMI removed after you
have 80% LTV or less.
Peter
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808
2601 Posts |
Posted - 05/17/2008 : 08:54:14 AM
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quote:
Originally posted by d_damiano
quote:
Originally posted by dkendall1979
Why would you put a client in a conforming loan at 95% LTV with a large PMI payment when you could put that same client in an FHA loan with a lower MI payment and rate?
David here are three more reasons in addition to Peters thoughts:
1. Non warrantable condos
2. Over the FHA loan limit
3. Investment property (BTW 1 out of 3 home sales that's right 33% of the market is vacation, second and investment homes)
3 others
- no 1.5% UFMIP, I'd much rather the 1.5% be an 808 MB fee (my screen name, go figure)
- no seller resistance when presenting an Conv offer vs FHA where I've seen more than a few turned down once they found out it was FHA, espc when they see DPA anywhere on the contract
- turn times |
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mvalle99
38 Posts |
Posted - 05/17/2008 : 09:54:29 AM
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The last I knew is you must payoff the FHA 30 year loan down to 78% LTV before MI goes away.
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808
2601 Posts |
Posted - 05/17/2008 : 10:13:40 AM
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quote:
Originally posted by mvalle99
The last I knew is you must payoff the FHA 30 year loan down to 78% LTV before MI goes away.
or in 5yrs I think you can get it reappraised and if you LTV comes back at <78% based on the new appraised value you can have it dropped, although fat chance on that happening in todays mkt. |
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aspiring1
1313 Posts |
Posted - 05/17/2008 : 11:03:24 AM
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quote:
Originally posted by rtrefflich
On FHA I believe that you have to keep it for five years and regardless of the LTV you need to have it.
In running some scenarios with someone who does FHA they told me that even if we put down 20% they still need the PMI and it stays on regardless for five years.
quote:
Originally posted by akaagassi
I'm a little ignorant here...
2 things:
I thought MI was required to be on for at least 5 years on FHA???
I thought regardless of conventional or FHA, once below 80% a borrower can have it removed???
Am I missing something???
quote:
Originally posted by peter
One important difference is that regardless of the low LTV, you are stuck with MI if you have an FHA loan while in a conventional loan you can have the PMI removed after you
have 80% LTV or less.
Peter
That's true; with FHA there's a mandatory five year MI payment. |
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slants
4274 Posts |
Posted - 05/17/2008 : 11:17:26 AM
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quote:
Originally posted by 808
quote:
Originally posted by mvalle99
The last I knew is you must payoff the FHA 30 year loan down to 78% LTV before MI goes away.
or in 5yrs I think you can get it reappraised and if you LTV comes back at <78% based on the new appraised value you can have it dropped, although fat chance on that happening in todays mkt.
It's 5 years AND 78%. If originated at max allowable LTV, it takes 10+ years to amortize < 78% unless one pays substantial additional principle during the 1st 5 years. |
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smoothlid
419 Posts |
Posted - 05/18/2008 : 12:17:21 PM
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we have run into min fico issues for pmi...where we have an approve/elig, but cannot get pmi at say 95% with a 645.
PMI is the bigger issue for us more often thsn not.
we do have FHA, and...
5 yrs min PMI is correct
even if 50% down. |
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slants
4274 Posts |
Posted - 05/18/2008 : 12:23:55 PM
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quote:
Originally posted by slants
quote:
Originally posted by 808
quote:
Originally posted by mvalle99
The last I knew is you must payoff the FHA 30 year loan down to 78% LTV before MI goes away.
or in 5yrs I think you can get it reappraised and if you LTV comes back at <78% based on the new appraised value you can have it dropped, although fat chance on that happening in todays mkt.
It's 5 years AND 78%. If originated at max allowable LTV, it takes 10+ years to amortize < 78% unless one pays substantial additional principle during the 1st 5 years.
Pretty sure it's 5 years minimum AND 78% of original appraisal value at time of origination. No new appraisals to drop MI. |
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slants
4274 Posts |
Posted - 05/18/2008 : 12:45:41 PM
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Found it:
From Mortgaggee Letter 00-46
Borrower Initiated Cancellation: In addition to mortgages that reach the 78 percent loan-to-value ratio threshold through initial scheduled amortization, borrowers can also request through their lenders cancellation of the collection of the annual mortgage insurance premium for those mortgages that reach the 78 percent threshold in advance due to prepayments (principal curtailment). Those loans reaching the 78 percent loan to value threshold sooner than projected (but not sooner than five years from the date of origination except for 15-year term mortgages) due to advanced payments of principal will have the annual premium collections canceled upon the servicing lender submitting supporting information to FHA following the borrower's request provided that the borrower has not been more than 30 days delinquent on the mortgage during the previous twelve months. As part of their annual disclosures to homeowners, servicers are to notify borrowers of their option to cancel the annual MIP in advance of the projected date by making additional payments of mortgage principal. As stated in ML 00-38, the 78 percent threshold will be predicated only upon the initial sales price or appraised value, whichever was less. |
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velecico
3991 Posts |
Posted - 05/18/2008 : 9:58:55 PM
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quote:
Originally posted by dkendall1979
Why would you put a client in a conforming loan at 95% LTV with a large PMI payment when you could put that same client in an FHA loan with a lower MI payment and rate?
Many propeties cant go FHA |
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Ron D.
74 Posts |
Posted - 05/18/2008 : 11:31:56 PM
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| Hello fellas, just a quick question for peter or anyone who has an answer. What lenders are still accepting a voe for fannie loans? The last I had heard was that even though the approval listed it as an acceptable form of income most, if not all lenders stopped accepting them? |
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peter
4613 Posts |
Posted - 05/19/2008 : 12:51:50 PM
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HSBC will still accept VOE only, if the DU or LP findings
allow it, but they will execute the 4506T to verify the
borrower's W-2 income prior to funding. GMAC will do the
same and will even send out their own VOE form to verify against
the broker's VOE.
Peter |
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