April 2009

Chicago Area – First Time Home Buyers Control the Market

The real estate market here in the Chicago area is heating up. Traditionally the Spring market is the most active time of the year for home sales, and as the weather starts warming up here, the market is getting warmer, too. Most of the activity is still in the lower priced category, and first time home buyers are the biggest part of the market now. There are some big reasons why first time home buyers are the focus now. Most importantly, they don’t have a home to sell. I’ve talked to a lot of home owners who would love to move and find a home with more room for their growing family, or a place which meets their needs better than their current home does. But in order to do that, they would have to sell their current home first, and right now that is a hard pill to swallow….

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending April 24th, 2009, my take on the week’s financial news and how it affected Illinois mortgage rates. With no major economic news released and no big announcements or surprises of any kind, this was a boring week in the mortgage world. But that’s not a bad thing. Boring is another word for stable, and it has been a long time since the mortgage market has been described as stable. This mortgage market has been ruled by volatility and it hasn’t been out of the ordinary for lenders to re-price two or three times within a single day. This is one of the things that most consumers aren’t aware of, that rates are constantly changing and the rate quoted in the morning may have expired before the afternoon hits. (This is why it makes no sense to…

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Jumbo Loans are Making a Comeback

The mortgage market has shrunk dramatically over the last 2 years. Not in volume, thanks to low rates and a refinance boom volume is strong. But the market has shrunk in the what types of mortgages are available. There used to be a wide variety of mortgage options available but with the mortgage meltdown the options have narrowed so that the only mortgages currently written are conventional and Government fixed rate loans. Many of the now extinct loans (Sub Prime and Option ARMs) were exotic varieties which were appropriate for some situations, but were abused and rolled out to borrowers who didn’t fit the profile for benefitting from the loan, often didn’t understand what they were getting in to, and these abuses were a big cause of the mess we find ourselves in. One of the biggest casualties of the mortgage melt down has been Jumbo loans, but they might…

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Illinois Mortgage Rates Weekly Update

  Welcome to Illinois Mortgage Rates and News week in review for the week ending April 17th, 2009, my take on the week’s financial news and how it affected Illinois mortgage rates. Optimism is alive on Wall Street. Stocks are seeing the sunny side of things and the rally is still in place. There some signs that the economy is stabilizing, or at least starting to come out of its free fall. Consumer confidence is a little better than expected, the Fed Beige book shows some signs of moderation in the level of decline and the big banks all came out with record earnings this week. With all the money being pumped into the economy it should be pulling out of its dive, but we are still flying at tree level. We may have avoided the crash, but it is doubtful that we will be gaining altitude anytime soon. Consumers…

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DU Refi Plus – How the Obama Mortgage Plan Works, and What it Can Do to Help You Save Money When You Refinance

Rates are down again near all time lows, and the opportunity to refinance your mortgage and save money by lowering your rate has been one of the few bright spots in a gloomy economy. That is, it’s been a bright spot for those who were able to refinance, but for the most part, those refinancing have fit into one of two categories, well qualified borrowers who had plenty of equity in their homes, or home owners with FHA loans who could take advantage of the FHA Streamlined Refinance program. There have been too many otherwise well qualified home owners who weren’t able to refinance because their home values had declined. The economy can’t recover until the housing sector is on the upswing, and the Obama administration has made it a priority to help more people refinance and lower their payments in spite of these circumstances. Home Affordable Mortgage, also known…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending April 10th, 2009, my take on the week’s financial news and how it affected Illinois mortgage rates. It’s not every week when the president says that more people should take the opportunity and refinance their mortgages, but that happened this week. So much of the fate of the economy is tied to strengthening the housing sector, and low mortgage rates are a big part of the solution. Because of the low rates we have been in a refinance boom for the last several months, but there have been too many borrowers who aren’t able to refinance because their homes have lost value. President Obama made a presentation to announce the start of his new mortgage program, Home Affordable. This program is designed to help home owners who are otherwise well qualified, refinance up to 105% of…

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Are FHA Loans the New Version of Sub Prime?

There has been a lot of press recently about FHA loans and how the program has been under stress. At the end of February 7.46% of FHA insured loans were  in default or seriously delinquent. There has also been a sharp increase in FHA loans which go into default without the new owner making a single payment, a clear sign of fraud. These are ugly and eye popping numbers. Because of these statistics, I’ve heard commentators state that FHA is a broken program and that FHA is only picking up the worst loans, and setting itself up for failure. I’ve heard others say that FHA is like the sub prime loans of the past and we are making the same bad decisions now that got the mortgage market into a mess before. There is no question that FHA is under stress, but in my opinion it’s not because the standards…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending April 3rd, 2009, my take on the week’s financial news and how it affected Illinois mortgage rates. It always amazes me how quickly we can forget what we previously believed and swing our thinking over to a completely different way of looking at the world. The same thing happens with markets. Just a few short weeks ago the consensus view was all doom and gloom on the stock market. Stocks were low and headed lower. It was almost a sense of panic. Since then the economy has still had its share of bad news, and the overall outlook is not much different now than it was then. But the attitude now has completely shifted. The stock market is roaring upwards and commentators are convinced we are at the bottom of our downswing and ready to resume…

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VA Streamlined Refinance – A Great Benefit for Veterans

With rates down near record lows, one of the most popular loan programs has been the FHA streamlined refinance. This is a way for anyone who has an FHA mortgage to lower their rate and lower their payment without going through all the qualifying they had to when they first got the loan. FHA is a government program, and the idea is that if you are able to make your payments on time with a higher rate, you will be in a better position with a lower rate, so they made qualifying as easy as possible. You don’t need to show any income or assets, the biggest credit issue is whether you are paying your mortgage on time (some lenders have established minimum credit scores), you can roll in most of your costs and in most cases you don’t even need to get a new appraisal. FHA is the biggest…

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