Mortgage Report

*Estimated rates for the week of June 29, 2009

30 year conforming 5.125 – 5.250
30 year jumbo 5.75 to $600k
7/1 ARM 4.875 – 5.125 conforming and jumbo
FHA/VA 5.25 – 5.50
OR VA 4.99 w/1.50 or 5.125 w/1.00

Rates are trading in a new range of 5.25 – 5.75%. Hopefully, we will see this continue although there is more pressure for rates to increase than to decrease. Economic reports remain mixed and that ’s helping to keep the rate market range bound. However, it’s nice to see that the Oregon VA loan program is back with competitive rates. Remember that the OR VA loan uses regular mortgage insurance unlike the Federal VA’s funding fee (and they don’t lend to 100%).

For a little historical perspective, I just reviewed a rate sheet from June of last year. FHA rates were at the 6.50% level. That’s over a point higher than today – and they could be a full point higher this time next year. Sounds like the time to buy to me.

We are all still dealing with the problems of the HVCC. Although turn times have improved, we are still seeing a lot of issues with values and conditions. We knew this was going to occur but the issues don’t seem to be getting better. There is a large group of industry professionals who are trying to reverse HVCC. For more information and to review the petition, go to this web site http://www.hvccpetition.com/ If everybody signs on, maybe we can get some positive changes made.

And from those who brought us the HVCC, we are due for yet another new round of regulations. The Housing and Economic Recovery Act is set to become effective at the end of July. The Act revises the Truth in Lending Act’s disclosure requirements. The outcome of the new regulation will require more disclosure, more paper, and could, in a few situations, cause delays in closing transactions. In addition to loan disclosures still being sent out within three business days of taking an application, the new rules require that the transaction cannot close before 7 days if these disclosures are mailed. This rule shouldn’t pose much of a problem since most transactions have 30 days to close. What could cause a delay is that if the APR changes by more than .125%. If that occurs, new disclosures would need to be sent again and the transaction can’t close within 3 days from the receipt of the new disclosures. So if things change and the disclosures are mailed, we’re back at the 7 days before closing rule. We are just getting familiar with these guidelines and I’m certain we will all here more about them. A couple of things that we all can do to help make our transactions go more smoothly……get borrowers pre-qualified as soon as possible, make sure the borrowers choose the financing arrangement earlier in the transaction, and get the borrowers to lock the loan early on too. Changing loan programs, changing the rate and points at the time of locking the loan, and loan amount changes could cause the APR to change and trigger the re-disclosure rule. More later