Napa Mortgage News

Ditch your Mortgage Insurance......Meeting with the new DRE commissioner....Daniel Sandri

October 16th, 2018 8:17 PM by Dale DiGennaro

It appears that Fannie & Freddie have stepped up to the plate and are now helping borrowers ditch their mortgage insurance!

Freddie Mac, and now Fannie Mae, are on a push to lighten your (payment) load.

Provided, that is, if you are paying private mortgage insurance.

More than 4.1 million U.S. homeowners with $1.1 trillion worth of mortgages had mortgage insurance from 2013 through 2017, said U.S. Mortgage Insurers President Lindsey Johnson.

Nearly 73,000 California properties were financed with conventional mortgage insurance in 2017, second only to Texas, which had more than 79,000 MI-financed properties, Johnson said.

The average monthly mortgage insurance is roughly $134, according to the website of mortgage insurance company MGIC Investment Corporation.

Under the 1998 Homeowners Protection Act (a.k.a., the PMI cancellation act), lenders must remove the mortgage insurance when borrowers with good payment records pay down the loan to 78 percent of the original balance. Of course you can always refinance into a new mortgage without the insurance.

But getting rid of your PMI isn't always easy. Just 4 percent of MGIC's insured borrowers have initiated the mortgage insurance removal process in recent years, according to the company.

And borrowers with really low mortgage rates are captive to unresponsive lenders, since they're not likely to refinance into a loan with a higher interest rate to get rid of PMI.

Now Freddie and Fannie are coming to the rescue, leading, supervising and approving the PMI removal process for you.

Freddie and Fannie will both consider the original appraisal value or the current value to decide if you have at least 20 percent equity. One difference is that Fannie will require confirmation that the original value did not drop. Freddie assumes the original value is good. Your servicing lender (the company you make your payments to) has to vet your property through Fannie or Freddie. If current data is not available for your home, you may be required to pay for an appraisal.

Call your servicer and ask if Fannie or Freddie owns the loan.

If your loan is owned by Freddie Mac, your loan servicer can do this by Oct. 1.

Fannie Mae will be ready to implement by Jan. 1, and Fannie's servicers are required to implement by March 1.

If you would like assistance with this...Just call or email!

VISIT OUR WEBSITE

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THINKING OF SELLING OR EVEN DOING A REFINANCE...
Our "Home Price Index" will take into consideration your original purchase price & date of home purchase to determine...

according to the appreciation rate for the region you live in...whether it is a good time for you to refinance now or....if you are getting ready to list your home...what a reasonable value for your area would be. You can also sign up to receive a quarterly report of your homes value based on the up to date analysis of your region.

Just a couple of ways that Custom Lending keeps you informed of our changing market place so you can make the best financial decisions for you and your family!

U.S. and EU Take a Step Back

The main influence on mortgage rates this week was fresh news about tariffs, which was negative for mortgage rates. The major economic data came in mostly on target, and Thursday's European Central Bank meeting contained no policy changes and had just a minor impact. As a result, mortgage rates ended a little higher.

On Thursday, the Trump administration announced that the U.S. and the European Union (EU) had agreed not to escalate their trade dispute. Neither will impose further tariffs while the two sides attempt to work out their differences. If the U.S. and the EU can come to terms, it would allow them to work together to focus on improved trade agreements with other countries, most notably China. Investors reacted to the reduced chances of a trade war by shifting to riskier assets such as stocks from safer assets such as bonds, including mortgage-backed securities (MBS). The decrease in demand for MBS caused mortgage rates to rise a little.

Friday's release of second quarter gross domestic product (GDP), the broadest measure of economic growth, showed a massive increase of 4.1%, which was close to the expected levels. This was up from 2.2% during the first quarter and was the highest reading since the third quarter of 2014. Strength was seen in both consumer spending and business investment. Investors now will be watching to see if the underlying trend is closer to the first quarter or the second quarter levels.

Looking ahead, the important monthly Employment report will be released on Friday. As usual, these figures on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month. Before that, the Core PCE price index, the inflation indicator favored by the Fed, will be released on Tuesday. The ISM national manufacturing index will come out on Wednesday, and the ISM national services index will come out on Friday. The next Fed meeting will take place on Wednesday. No change in policy is expected.

One of the greatest things about summer is all the visits from family & friends! My sister Penny came down from Oregon last week and my good friend Larry came back from Las Vegas for a visit to his old hometown! Fun was had by all!

Last week I met with our new Department of Real Estate Commissioner, Daniel Sandri accompanied by three other California of Mortgage Professionals (CAMP) members to discuss changes in processes to make it easier for consumers to get a loan. The outcome was positive and we are looking forward to working closely with them.

"Thank you for always trusting in us to do the best for you and your family and please feel free to call me anytime you have questions. I will be happy to share with you whatever information you may need!"