Gulf Coast Associates' Blog: Mortgage Information

Lots of folks are considering refinancing their current home loans in this falling interest rate environment. The problem is things have changed within the lending industry since many borrowers got their original mortgage or refinanced the last time rates fell. What used to be a simple process has now turned into a journey filled with many roadblocks. The fallout from the subprime mess has brought about all sorts of changes including new FICO score requirements, declining market penalties and the loss of many types of available loan programs. It almost seems like for everything the industry or the government has tried to do to improve things, more new changes occur that set the process back even further.

The latest problem revolves around those…

In response to the new conforming loan limit requirements included in the Economic Stimulus Package signed into law last month, HUD has released it revised county by county median property prices today. Under the Stimulus Package's guidelines, HUD was directed to re-evaluate its median property prices in order to determine the new maximum conforming loan limits for loans originated between July 1, 2007 and December 31, 2008. The actual FHA and Fannie/Freddie conforming loan limits for each county are based upon 125% of these revised median property prices. Some counties, designated as high cost areas, received their new limits based on 175% of the revised median home prices.

So, all counties across the country now have a new FHA conforming loan amount…

On Friday, February, 29th Judge Lawrence K. Karlton of the United States District Court for the Eastern District of California granted a motion for summary judgment for the Nehemiah Corporation of America for relief against HUD's rule to ban private seller paid down payment assistance programs as proposed in the “Standards for Mortgagor’s Investment in Mortgaged Property” regulation published October 1, 2007. In his ruling, Judge Karlton said "HUD failed to supply a reasoned analysis for its decision and didn't consider reasonable alternatives". The ruling permanently sets aside the final standard issued by HUD, remands the matter back to HUD for further agency actions consistent with the courts findings and disqualifies HUD Secretary Jackson from…

As professionals involved in the real estate and mortgage industries, we know all too well about the sensationalizing the press has managed to do with regards to the housing downturn and the mortgage crunch. Obviously, that's what they do best. And, in their eyes, they truly believe they are doing the right thing - you know, looking at our industries with a skeptical eye and keeping the public informed. However, every day we see another "headline grabbing" story about how terrible things are and if something doesn't happen soon, real estate throughout the country is going to sink into oblivion.

Well, in the interest of the consumer, here are some items you won't see widely reported in the media that will hopefully help bring some balance and perspective…

The largest private mortgage insurer's in the U.S. are raising their down payment and FICO score requirements for those looking for mortgage financing in “distressed markets” like the states of California, Florida, Arizona and Nevada and in many major metropolitan areas such as Washington, D.C., Detroit, Chicago, Boston and Atlanta. The changes were prompted by heavier than expected 3rd and 4th quarter claim losses and the anticipation of such claims continuing to rise in the foreseeable future.

Update! Additional Metropolitan areas added to the “distressed markets” list include the following locations:

Denver, the Maryland and Northern Virginia suburbs of Washington, D.C., Baltimore, Minneapolis, the Long Island and New Jersey suburbs of New York,…

By a 9 to 1 vote, the Federal Reserve's monetary policy committee (FOMC) cut the Fed Funds and Discount rates by 50 basis points today. The fed funds rate now stands at 3.00% and the discount rate at 3.50%. In their statement released right after the meeting, the committee stated that "financial markets remain under considerable stress, and credit has tightened further for some businesses and households. Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets. The Committee expects inflation to moderate in coming quarters, but it will be necessary to continue to monitor inflation developments carefully."

The move bolsters last Tuesday’s emergency rate cut of 75 basis points and is something…

Like most people, you'd have to think things have gotten about as bad as they can get when it comes to the mortgage lending industry. Between all the new regulations, federal and state laws, consolidations, bankruptcies and the discontinuation of numerous mortgage programs, the next phase of restrictions is taking things to a different level altogether.

Effective January 15th, Fannie Mae (FNMA) is instituting a loan-to-value (LTV) reduction penalty for properties located in declining markets. What does that mean? Well, depending on where you live, it means it just became that much harder to get a home loan. How's that you say? Well, not only do you have tougher guidelines to qualify as a borrower for a mortgage, now the property itself is going to play a…

Two things are for sure in 2008 for the mortgage lending industry; higher borrowing costs and more government regulations. While many say these are the necessary reforms needed to deal with the mortgage debacle of 2007, we see them as the consequences of an industry unwilling to regulate itself. The problem is, the only ones who will truly pay for an industry that ran amok, are the people looking to borrow money to buy a home.

So, in order to right the ship, here are some of the things that will happen, or, are proposed to happen to the industry in 2008. Some are sound changes and should be welcomed. Others are onerous or shortsighted as are most new regulations when the government has to intervene to correct abuses in the marketplace.

Higher Mortgage…