Mortgage Blog

FHA increases the loan limits for the Denver-metro area to $406,250! This is an incredible opportunity for all of us to increase sales activity by allowing those with a low down, better than conventional interest rates, and the lowest monthly mortgage insurance option for those who wish to become homeowners. Some investors are accepting FHA locks up to this new loan limit today and all others will follow in the coming weeks. If you wish to receive the latest City/County loan limits email me your request at randy.reed@mpspecialists.com

Speaking of homeowners, President Obama in part of his Stimulus plan, announces this past week his Homeowner Affordability and Stability Plan. The "Plan" calls for increasing subsidized loan modification programs to banks who participate in any TARP II monies. The objective is to encourage banks who have at risk or failing loans to modify existing terms for homeowners to lower their interest rates as well as to possibly lower their principals. Basically, if an investor does a loan modification, they can receive up to $1000 as an upfront fee and $1000 per year for 3 years if the loan stays current. A homeowner can receive up to $1000 per year in principal reduction for each year they stay current for the first 5 years. More details on this will come in the next week or two.

The other portion of President Obama's Homeowner Affordability and Stability Plan, is to offer homeowners who are current on their existing mortgages to refinance up to a 105% of the value of their home. Now, this is going to be a tad tricky because if a homeowner has a second mortgage; the second lien holder has to agree to the terms AND re-subordinate the existing lien. Again, more details to follow in the coming weeks.

Interest rates are awesome and are still at their 40 year lows. Tell everyone you know that they literally have a "once in a lifetime opportunity" with home prices being the way they are AND rates being lower than what we have seen in my 18 years in the business! Things are taking a bit longer to get loans through the system, so show some courtesy and be patient with those who are working harder than they have ever had to especially with all the restrictions we have going on in the mortgage industry.

Randy Reed - CMPS, CML, Licensed Mortgage Broker

303.524.9191

As we eagerly await the Senate’s vote on the stimulus package today, Secretary of Treasury, Tim Geithner, will reveal proposals for spending on the remaining TARP money. It will be interesting to watch as the financial sector reacts to these announcements. Meanwhile, Mortgage Bonds are higher this morning.

Also today, Federal Reserve Chairman Ben Bernanke will discuss the Fed’s liquidity efforts. Today the Treasury will auction $32B in 3 year T notes. The Feds also state that they are committed in buying $600B in mortgage backed securities. These events will have a major impact on stocks and bonds.

Trading this morning has been positive. Today’s recommendation is to float. However, watch closely as things can change very rapidly.

Randy Reed

(303) 524-9191