August 2008

Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending August 29th, my take on the week’s financial news and how it affected Illinois mortgage rates. Because this is a holiday weekend, (and I’ve had some computer issues as well) this is a shortened version of the update. I’ll have the breakdown and analysis in the next few days. A lot of information came out including some data showing that the economy was stronger and inflation was higher than expected. Normally this news would have killed mortgage bonds and sent mortgage rates soaring. It didn’t this week because this was all seen as old info that doesn’t reflect what is happening now. Rates improved every day except for Friday when mortgage bonds tanked (the Friday before a long weekend effect). For the week mortgage rates are slightly better than last week.(here is a detailed look at…

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Moratorium on FHA Risk Based Pricing Means FHA Will Cost More for Most Borrowers

For most Chicago area home buyers, the cost of FHA financing is about to go up. For years FHA had a one price fits all policy. As long as you qualified for an FHA mortgage you would get the same terms, whether you had a large down payment or small, and no matter what your credit score was, the mortgage insurance was the same price for all. This policy changed a few months back when FHA adopted a risk based pricing model. Risk based pricing is the idea that those borrowers who are the best credit risks will pay the least, and borrowers who have a riskier credit profile will still be able to get financing, but they will have to pay a higher rate for their mortgage insurance. This short-lived policy is about to change again. As part of the recently passed Housing Bill, starting October 1st, there will…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending August 22nd, my take on the week’s financial news and how it affected Illinois mortgage rates. This was another week in the mortgage bond market with huge volatility on a day to day basis, but an amazingly stable market when you squint your eyes and look just at the week end results. In other words, mortgage bonds went up and down like crazy , but mortgage interest rates ended the week just about where they started. This is the end of August doldrums, and there wasn’t a lot of market changing news released this week. Still, there were a couple of events that make me think that the market focus is starting to change. The PPI (Producer Price Index) a measure of inflation, jumped 1.2% in July, the largest increase in 27 years. Inflation hawk and…

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You Want to Close When? Closing Quickly on Your Chicago Area Mortgage

When I first started in the mortgage business here in the Chicago area almost 2 decades ago, it was normal for a home purchase to close in 60 days. That is a long time, but it took that long to close because that’s how long it took to get a mortgage approved. The financing contingency date (the date in the contract that you need to have your mortgage approved by) was usually 45 days after the contract was accepted. Everything took longer back then from the appraisal to underwriting. If a file needed to close in 30 days that was a real rush, and we had to pull put all the stops to get it done. Like so much else, that way of doing business is long gone. Now most contracts are written to close in 30 days or less. I’ve had two loans this month that closed in under…

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Chicago Area Real Estate – Are We Turning the Corner?

The real estate market has had more than its share of bad news lately. Home prices are down, foreclosures are up and the outlook for the future is more of the same. From a big picture view the real estate market is miserable. But I’m seeing some signs here in the Chicago area that we may not have turned the corner, but we may be a lot closer than most people think. This isn’t a scientific account of what is going on, it is simply an anecdotal look at what I’m seeing in the market right now. I’m not sure what exactly is causing this, maybe it’s a result of the new housing bill, or maybe it’s just the realization from home buyers that there are bargains to be had, but the real estate market here in the Chicago area is active. Here are some “trends” I have noticed: Properties…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending August 15th, my take on the week’s financial news and how it affected Illinois mortgage rates. Over the last several weeks, mortgage rates have been going in a pattern, two steps forward – two steps back. Some weeks it is three steps forward and two steps back and other weeks it is exactly the reverse. In other words mortgage rates have been volatile with big daily moves either up or down, but over all they are in a tight pattern with mortgage rates hardly changing at all from week to week. We may be about to see a change as mortgage rates improve and break out of this dance. Then again, this could be a head fake to the outside before we return back to the range. As has been the case over the last several…

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Lenderama – Mortgage Industry Blog

It’s been my goal here at Illinois Mortgage Rates and News to keep you informed about what’s happening in the real estate and mortgage markets, especially here in the Chicago area and throughout Illinois. In addition to this blog, I’m now also contributing to a group blog, Lenderama, the mortgage Industry blog. This blog is more of an insider account of topics of interest to those of us in the mortgage industry, and I’m excited to be part of a very impressive line up. It has been one of the blogs I had to read every day, and I look forward to adding to the conversation. If you are in the mortgage or real estate industry and Lenderama isn’t already on your must-read list, stop by and visit.  

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Chicago Area First Time Home Buyers – TAX Credit info – (updated)

Update 02-14-2009 As part of the new stimulus bill,  the First Time Home Buyer Credit was altered and the credit raised from $7,500 to $8,000 (This is 10% of the purchase price up to a maximum of $8,000). As originally written, this credit would be taken in the first year but have to be paid back over the next 15 years, so it was more of a no interest loan than a true credit. That has been changed and it is now a full credit as long as you stay in the home for at least 3 years. The credit is good for any first time buyer who buys between January 1st and December 1st of this year and is available for singles with income up to $75,000 per year, and married couples with income up to $150,000.   One of the biggest provisions of the recently signed housing bill…

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Illinois FHA loans – What Do You Do When Your Chicago FHA Loan Isn’t Automatically Approved?

If you are buying a home in Chicago or the Chicago area, an FHA mortgage might be your best financing choice. With FHA there are two ways to get your mortgage approved. The first is through an automated approval. This is the way nearly all conventional loans are approved, and most FHA loans are approved this way, too. When you apply for a mortgage approval or pre-approval your loan officer enters all your personal and financial information into a computer program and uses an Automated Underwriting System (AUS) to determine the risk in the loan. The system issues either an approval or a refer to the underwriter decision. This is a very simplified explanation. Part of getting the approve decision is based on how your loan officer interprets your loan information and how it corresponds to FHA guidelines. If the wrong information is put in, or if the information is…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending August 1st, my take on the week’s financial news and how it affected Illinois mortgage rates. Allow me to take a moment away from the weekly mortgage rate update to mark an anniversary, of sorts. No, there are no holidays, no president’s or celebrity birthdays that I know of, and if it is your wedding anniversary, congratulations, but that’s not what I’m talking about either. Give up? This week marks the 1st anniversary of the mortgage crisis and the resulting credit crunch. Celebrating probably isn’t on the agenda, but it is worth a look back to see what happened and how much has changed over the last year. I mark this as the anniversary of the start of the mortgage mess because it was just a year ago that American Home Mortgage (AHM), the 10th largest…

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