Want To Know Why Mortgage Rates Are Up Over 1.125 Percent In 10 Days?

That is right! Interest Rates have jumped over 1.122% in last 10 days!  Do you want to know why?

Well my good friend, John Yang posted the article below this morning on facebook, and I thought I love to share it with you!

Great Job, John!



Memorial Day, conforming mortgage rates have jumped by more than 1.125
percent, adding thousands of dollars to the annual cost of

To the casual observer, the moves may seem random. There’s a reason this is happening, however.

It starts with inflation.

an economic force, inflation erodes the value of the U.S. Dollar. Left
unchecked, it drives up the Cost of Living as each dollar “buys less”
at the supermarket, gas station, or anywhere else.

But with
respect to mortgage rates, inflation’s impact is more immediate.
Because inflation devalues the dollar over the long-term, it renders
long-term mortgage bonds a less attractive investment for traders.

bond investors are repaid in U.S. Dollars, after all, it would make the
investment worth less if the dollar is in an inflationary freefall.

in situations when inflation is likely to present, we find that traders
often sell out of their mortgage bond positions which, in turn, drives
down the bond prices. Then, because bond yields move in the opposite
direction of bond prices, rising rates are the inevitable result.

Lately, Wall Street is fearing inflation for a number of reasons:

  1. Job losses are slowing, adding to consumer spending expectations
  2. Gas prices have risen 41 days in a row
  3. The federal government is increasing the money supply

3 factors — plus a few others — are all coming to a head around the
same time and traders are getting defensive with their portfolios. As a
result, they’re selling their mortgage bond positions and it’s driving
mortgage rates higher.

Rates may continue to trek toward 7
percent through July and August, or they may retreat toward 5 percent.
We can’t know for sure. What we can know, though, is that
volatility in rates should continue until the economic picture gets
more clear. That could be next week, or next year.

For now, be ready to lock at a moment’s notice. Mortgage rates are changing quickly.

FHA Allowance of Tax Credit

This update from Mortgagee Letter 2009-15 establishes guidelines for use of the first-time home buyer tax credit as settlement funds.Here are the 10 things you need to know about these guides:
1.The IRS tax credit refund can be made only to the taxpayer and not a third party.
2. Government agencies may offer tax credit advances with second liens.
3. The buyer cannot get cash back through the tax credit advance.
4. The 2nd lien may not exceed the downpayment, closing costs, and prepaid expenses.
5. The 2nd lien may be "soft" or require payments.
6. Payments on 2nd liens must be included in ratios unless deferred for at least 36 months.
7. Balloon payments on 2nd liens may not be before 10 years.
8. FHA approved lenders and FHA approved non-profits may purchase the tax credit.
9. Tax credit purchaser may not charge more than 2.5% of the tax credit as a fee.
10. IRS may deduct from the tax credit: unpaid student loans, tax liens and garnishments.

If you’re an FHA lender that has the resources and are quick to implement new programs, then take advantage of this change to help boost your purchase volume. This program can form the foundation of your homebuyer marketing for the rest of the year. You only have till December 1st, so take action.

I suggest going to city adminstrators and informing them about this program. Cities throughout the country have been allotted millions through the ARRA funds to help them create home ownership and this would be a way you can help them make those funds go farther, which is music to any city adminsitrator’s ears. Position yourself as an FHA expert and offer to do a community seminar about this program.
To read this update in its entiretyclick here
For the IRS tax credit form 5405click here
For IRS tax credit summaryclick here

Carlos Samaniego,CMPS
Certified Mortgage Planning Specialist

FHA Reveals New Program To Program To Help New Homowers Purchase Homes

Okay, Okay…. stop the phones! We’ve been receiving calls all day about the “announced” monitization of the $8000 first-time homebuyer tax credit. “Where’s the ML?” Well, there ISN’T one yet… HUD Secretary Donovan appeared at a NAR function earlier today, and this is an exact excerpt of his remarks: “We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to “monetize” the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly.” Okay – so what does that MEAN? It means that they are about to “officially” put their stamp on approving the process (and authority) on who/where/why/when a first-time homebuyer can get a LOAN for the $8000 tax credit – to be used as part of the required down payment! THIS IS HUGE! As soon as the “official” announcement is out, we will get it to you. For now, just be prepared to answer questions to your borrowers, and prepare them for this big benefit. THIS will open up the floodgates guys! Stay tuned….To Be first to here details got to…
WWW.ASKCarlosSamaniego.com and get our update list for this new program.Carlos Samaniego,CMPS (909)512-6418

Credit Card Limit Reductions Impact 16% of the Population According to FICO

Great Article, by one of my favorite websit Credit.com

A new FICO report on credit data from the second half of 2008, revealed that 16% of the US population
had some reduction in their credit card limits. A majority of these
consumers didn't have any late payments, collection accounts or other
negative records to trigger the change.

"Fair Isaac's study looked primarily at those consumers whose
revolving credit lines were cut even though there were no new
delinquencies in their credit reports to warrant a line reduction. In
most cases, the line reductions — an average of $2,200 — had little
impact on consumers' FICO credit scores.

"Indeed, the line reductions hit consumers with credit scores well above the national average, with a median score of 770.

"That may come as a surprise to those consumers because they pay off
their balances every month and are careful with their credit, says John
Ulzheimer of Credit.com. But at the same time, those customers are also
generally less profitable for lenders, he says."

numbers are likely to have increased in 2009 as credit card companies
continued to slash credit limits.  Here are a couple tips if you have
had your credit limits cut or are worried that they might be reduced in
the future:

  • Keep old credit cards open by using them at least once a month.
    Inactive accounts have a higher risk for being closed by the credit
    card company. Account closure can dramatically lower your total credit
    limit and harm your credit scores.
  • If you have good credit, you may want to open a new credit card to add a bit of a cushion to your total credit limits.
  • Check your credit card expiration dates. Make sure that you get a new card activated when the old one expires.
  • Open all mail from your credit card companies and read the fine print.
  • Check your credit reports regularly to see how your credit limits are being reported to the bureaus. 
  • Aim to keep your monthly credit card use between 1-10% of your
    total credit limits for the best credit score. You don't want to look
    like you are "maxing out."

Have your credit card limits been reduced recently? Share your story in the comments section below.

Emily Peters

Time for you to get an FHA Loan!

There could be no better time than now to by your first home in Southern California, especially in the Inland
Empire region. Prices have dropped in some places in excess of 40%, interest rates are hovering around in the low 5% and FHA loans are your best bet if you have some credit challenges.
Read this article now I just read on CNN Money, then call me directly to find out how to get an FHA loan at (909)512-6418.
Carlos Samaniego,CMPS Qualifying for a low-down FHA loan Federal Housing Administration lending is soaring – with good reason. These mortgages are affordable, flexible and available. By Les Christie, CNNMoney.com staff writer Last Updated: April 6, 2009: 3:17 PM ET

NEW YORK (CNNMoney.com) — Mortgages insured by the Federal Housing
Administration can be a lifeline for low-income or high-risk borrowers.
These loans have tiny down-payment requirements, competitive rates and
easy credit-score hurdles.

In fact, terms are so attractive that some may ask why all home buyers don't use FHA mortgages.

a lot more of them do. Since the housing bust began, FHA lending has
soared to account for 20% of the total dollar volume in home loans – up
from just 3% in 2006.

There were 384,451 home purchase loans
issued during the first two months of 2009, nearly four times the pace
of 2008 when 631,649 were issued, and far more than the 278,393 issued
for all of 2007. The number of authorized FHA lenders skyrocketed 500%
over the past two years.

"FHA stays active in volatile and
declining markets, continuing to make mortgage credit available to
borrowers, even when private mortgage providers are withdrawing," said
the Secretary of Housing and Urban Development, Shaun Donovan, in
Senate Appropriations Committee testimony on Thursday. "During
difficult times, it is critically important to have an entity like FHA
play this role – offering families access to near-prime rate financing."

loans are especially attractive for homebuyers with steady incomes who
cannot scrape together a 20% down payment because FHA lenders will
finance up to 96.5% of the home price.

According to Maryland-based mortgage consultant Allen Hardester, the other attractions of FHA loans include:

  • A better loan modification program.
    The agency has a long history of helping borrowers who fall behind on
    payments. In two-thirds of default cases the agency figured out a plan
    to keep borrowers in their homes. And 90% of those mitigations were
    still working after two years.
  • They're cheap to refinance. FHA loans can be easily – and often cheaply – converted to similar FHA mortgages if interest rates drop.
  • Borrowers with weak or limited credit histories may still qualify.
    Mortgage applicants can have very short credit histories or a late
    payment or two on their records and still get approved with low
    interest rates. The FHA guidelines set the credit score minimum at 620,
    but exceptions may be made for people with even lower scores.
  • Low rates. For
    months, interest rates on FHA loans have been lower than conventional
    loans. Plus, rates don't vary with credit score; you pay the same
    whether you're a 620 or a 700.

Although these loans target
low- and moderate-income Americans, there are no income restrictions.
However, FHA does limit the amount that can be borrowed, based on area
home values. For example, the most that can be borrowed in a high-cost
area such as New York City is $729,750; meanwhile, in Buffalo, N.Y., a
purchaser can borrow no more than $276,250. Check the cap limits in your home town.

addition, borrowers must pay an up-front insurance premium totaling
1.75% of the loan, which goes into FHA's fund for repaying lenders if
borrowers default. So if you take out a $200,000 loan, you would need
$3,500 at closing, in additional to normal costs.

there are few restrictions to getting an FHA loan. However, there is a
perception that they are difficult to obtain. And they once were.

lenders would originate FHA loans during the housing boom because the
underwriting and appraisal process was so strenuous. "If there was a
crack in the sidewalk, they wouldn't approve the loan," said George
Hanzimanolis, a mortgage broker in Pennsylvania and past president of
the National Association of Mortgage Brokers..

That all changed a
few years ago when HUD rethought its guidelines. Now, the process can
be nearly as fast and painless as conventional loans.

The one
class of borrowers who may be slightly better off with conventional
mortgages are ones with very high credit scores who make substantial
downpayments. Keith Gumbinger, of HSH Associates, a publisher of
mortgage information, said they may save an eighth of a point on their

To find an authorized FHA lender, go to the Department of Housing and Urban Development Web site.  To top of page

First Published: April 6, 2009: 11:38 AM ET
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