Hurricane Season Bears Down—With 7 Million Homes at Risk and a Federal Flood-Insurance Program Set to Expire

If this summer has had you trying to get to grips with hurricane season, you’re not alone. Millions of homes across the U.S. sit in harm’s way, and the resulting damage could be in the trillions of dollars, according to a 2018 report.

Those estimates come from real-estate data provider CoreLogic and are based on forecasts from the National Oceanic and Atmospheric Administration that foresaw a 2018 Atlantic hurricane season that was “near or above normal.”

Image result for hurricane

This year, nearly 7 million homes are at risk of hurricane storm surge, CoreLogic said. That’s the same number as last year, when NOAA predicted an “above normal” season. But total reconstruction costs are forecast to be more than $1.6 trillion this year, a jump of 6.6% compared with the $1.5 trillion estimated in 2017. The driver? Higher costs for construction, equipment and labor.
Superior Mortgage Lending is a Las Vegas Mortgage Broker by design. We partner with the best Mortgage Lenders to offer multiple Loan Products and we are not captured with certain credit scores and can offer better rates and no fees.  We have been in the Mortgage Industry  for over 18 years and we offer the most competitive rates in Nevada, California and Arizona. At Superior we have No Origination and No Underwriting Fees.

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Mortgage Rates Highest in Over a Month

Mortgage rates were slightly higher today, depending on the lender.  Many lenders ended up raising rates last Friday afternoon as underlying bond markets weakened.  The remaining lenders had more distance to cover in terms of getting caught up with market movements.  The average lender is just slightly worse off.  Unfortunately, that puts rates at the highest levels in more than a month.

Whereas there was clear cause and effect behind Friday’s rate spike, today has been relatively drama-free and movement free.  This can be viewed positively or negatively.  On the one hand, it’s nice to see rates seemingly holding their ground here after Friday’s spike.  On the other hand, the fact that rates AREN’T doing more to recover suggests they’re not too terribly opposed to feeling out these new, higher levels.

As the week progresses, big-ticket events will once again have an opportunity to cast a vote on the next move for rates.  Last Friday, it was the wage growth component in the jobs report.  This Thursday, it will be the Consumer Price Index–an inflation metric that some economists believe will be influenced by rising wages.  In general, higher inflation means higher rates.
Today’s Most Prevalent Rates

  • 30YR FIXED – 4.625-4.75
  • FHA/VA – 4.25-4.5%
  • 15 YEAR FIXED – 4.125%
  • 5 YEAR ARMS –  3.75-4.25% depending on the lender

Ongoing Lock/Float Considerations

  • Rates moved higher in a serious way due to several big-picture headwinds, including: the Fed’s rate hike outlook (and general policy tightening), the increased amount of Treasury issuance to pay for the tax bill (higher bond issuance = higher rates), and the possibility that fiscal stimulus results in higher growth/inflation.
  • Despite those headwinds, the upward momentum in rates has cooled off heading into the summer months.  This could merely be the eye of the storm, or it could end up being the moment where markets began to doubt that prevailing trends would continue.
  • It makes sense to remain defensive (i.e. generally more lock-biased) because the headwinds mentioned above won’t die down quickly.  Temporary corrections can be explained away, but it will take a big change in economic fundamentals or geopolitical risk for the big picture to change.  While that doesn’t necessarily mean rates have to skyrocket, there’s a good chance it means rates will struggle to move much lower than early 2018 lows until more convincing motivation shows up.
  • Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders.  The rates generally assume little-to-no origination or discount except as noted when applicable.  Rates appearing on this page are “effective rates” that take day-to-day changes in upfront costs into consideration.
  • Mortgage Rates Highest in Over a Month
    Sep 10 2018, 3:10PM

Today’s Rates

Mortgage Rates change on a daily basis and can vary depending on your unique situation. Simply use the quick form below to receive FREE and accurate rate quotes from a nationwide network of trusted lenders.

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Why Las Vegas Luxury Real Estate Is The Next Big Market Boom

The Current Las Vegas Real Estate Market hailed the city as the No. 1 real estate market in the country this year, a feat that the city failed to achieve before. The year 2018 already showed strong numbers that make this recognition truly inevitable.

There were 184 existing homes priced $1 million dollars sold in Las Vegas during the first half of 2017, according to Salestraq, a Las Vegas realty research firm and the residential research firm of Applied Analysis. That was a great improvement compared to the 139 existing homes sold on the same period in 2016.

Image result for las vegas luxury homes with view of strip

It’s safe to say that Las Vegas is one of the finest cities in the world. Nevertheless, even the finest city isn’t safe from dreary economic failure. Who would forget the Great Recession in 2008? Even the largest cities were then inches away from complete downfall. In Las Vegas, jobs and the massive inventory of on-sale properties were gone, and foreclosures of homes were rampant. Las Vegas has always been the city to establish a luxury real estate business because it’s undeniable — Las Vegas is vibrant, full of verve and, dare I say, more innocent back then. It was a great city where buyers could start investing in luxury real estate. While the Great Recession took its toll, I witnessed how it rose as a city with a high demand for luxury properties again.

We have build a brand of professionalism and excellence, as well as having loan products to help more people. We specialize in mortgages only, that is our mission. Call us today and one of our professional Mortgage Loan Officers can help you get started to find your dream home or refinance your current mortgage.
 Our ultimate goal is to create lasting relationships with our clients so that we may continue providing excellent service for many years to come. We offer a wide variety of Residential and Commercial Loans. Superior Mortgage Lending is your premiere team of mortgage professionals in Las Vegas.
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Mortgage Rates Drop, Home Prices Rise

Mortgage rates were on the decline for the third consecutive week, according to new data from Freddie Mac.
The 30-year fixed-rate mortgage (FRM) averaged 4.51 percent for the week ending Aug. 23, down from last week when it averaged 4.53 percent. The 15-year FRM this week averaged 3.98 percent, down from last week when it averaged 4.01 percent. And the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.82 percent, down from last week when it with an average 3.87 percent.
“It is clear affordability constraints have cooled the housing market, especially in expensive coastal markets,” said Sam Khater, Freddie Mac’s Chief Economist. “Many metro areas desperately need more new and existing affordable inventory to break out of this slump.”
Mortgage rates were on the decline for the third consecutive week, according to new data from Freddie Mac
Separately, the Federal Housing Finance Agency (FHFA) reported a 1.1 percent second quarter increase in home prices during the second quarter. On an annualized basis, prices were up by 6.5 percent, with the greatest increases in Nevada (up 17 percent), Idaho (up 13 percent) and the District of Columbia (up 11.8 percent). North Dakota had the lowest year-over-year home price increase, up 2.1 percent.
But while home prices are up, home value growth is showing signs of cooling down. Zillow is reporting that annual home value growth during July showed in 20 of the nation’s 35 largest housing markets. Seattle, which was the leader in home value growth one year ago, is now the 12th fastest-appreciating housing market with a nine percent appreciation rate—last year at this time, the rate was 14 percent.
“The nation’s pricier markets are starting to feel an affordability squeeze as buyers begin to balk at the sustained, rapid rise in prices that have followed the strong job growth and high housing demand of the past half-decade,” said Zillow Senior Economist Aaron Terrazas. “But despite the slowdown, home values are still growing faster than their historic pace in almost all large markets, and it’s far too soon to call it a buyer’s market. And in many of the nation’s more affordable areas, aside from the pricey and exclusive San Francisco Bay Area, home value growth has perked up as buyers continue to seek good value for their money. But it’s clear that the winds that have boosted sellers over the past few years are ever-so-slightly starting to shift.”


 Why Choose Superior Mortgage Lending?

Superior Mortgage Lending is a Las Vegas Mortgage Broker by design. We partner with several lenders to offer multiple Loan Products and we are not captured with certain credit scores and can offer better rates and no fees.  We have been in the Mortgage Industry  for over 18 years and we offer the most competitive rates in Nevada, California and Arizona. At Superior we have NO ORIGINATION AND NO UNDERWRITING FEES.
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Treasury Weighs in With Mortgage Industry Recommendations

The Treasury Department has recommended some sweeping changes for consumer financial services including some directly impacting the mortgage industry. A new report recognizes the growing importance of non-depository institutions in the mortgage system, attributing it in part to various factors that have raised the cost of doing business such as the False Claims Act enforcement and the costs of default mortgage servicing.  The report also acknowledges that many among the growing ranks of non-bank mortgage originators have been early adopters of technology that has speeded up the mortgage lending process.

As indicated by the title of report, Nonbank Financials, Fintech, and Innovation, many of its recommendations are focused on the area of technology.

The report notes that financial and digital technology have the potential to improve the customer experience, shorten origination timelines, and deliver a more reliable, lower cost mortgage product, and delays throughout the production process could be relieved through policy changes to enable the adoption of time and cost-saving technology.

In the area of loan closings, Treasury makes some specific recommendations. They advocate for a transition from paper-based promissory notes which require pen and ink signatures and physical storage to electronic notes (eNotes). This would permit greater uniformity and quality control, speed up origination times and ease secondary market transfers. Use of these notes is currently hampered by a lack of capability in the primary market and of acceptance by some secondary market participants.

To facilitate the transition Treasury recommends greater encouragement from government actors like Ginnie Mae and the Federal Home Loan Banks for lender acceptance, increased Congressional funding to develop technical capacity for FHA digitization of loan files, and the development of shared technology programs for FHA, VA, and USDA to use for certain origination and servicing activities.



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In addition to saving them up to $525 on their appraisal, HomeReady and Home Possible loans give your borrowers access to:

  • Some of the cheapest BPMI in the country
  • Improved pricing to match regular conventional 30-year fixed pricing
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  • Down payment programs with as little as 3%

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Notarization methods now permit webcam interaction along with a form of identification that allow a notary to confirm the borrower’s identity. Existing eNotarization laws on the state level need clarification and the Uniform Law Commission needs to promulgate a framework to further acceptance of both in-person and electronic notarization.

While 33 states and U.S. territories have enacted the Uniform Real Property Electronic Recording Act (URPERA), not all of their counties are onboard.  States that have not yet authorized eNotarization should do so as well as permitting its interstate use. Congress should also consider enacting a minimum national standard, facilitating electronic closings, but not requiring their use.

Appraisals are another area in which Treasury sees a need for improvement, noting that changes in appraisal requirements enacted in response to the housing crisis have greatly affected the appraisal industry, causing delays and extended timelines for originations. Again, use of technology can remove some of these problems.

Specific recommendations include an update of the Title XI FIRREA appraisal requirements. Congress should look at the progress in automated and hybrid appraisals and permit their use where appropriate.  The report supports Freddie Mac and Fannie Mae’s (the GSEs’) efforts to standardize appraisal reporting as well as their limited use of appraisal waivers and, along with FHA, of their adoption of electronic portals to submit appraisal forms. The report recommends that FHA and other government programs also develop automated appraisal capabilities and targeted appraisal waivers. The report advises a cautious approach to digital and automated valuations, balancing convenience against risk.

The report cites the role played by civil actions against lenders brought under the False Claims Act (FCA) by the Department of Justice (DOJ) as a factor in depository institutions leaving the mortgage business. This shift, it maintains, has also negatively affected borrowers’ access to credit.  FCA claims that lenders supplied loans to government insurance programs that did not meet standards have resulted in $7 billion in fines to date.

The report says material errors in origination and servicing should be penalized but expresses concerns with the way DOJ and FHA determine violations and calculate damages. They say they should strike a balance between loan requirements an agency deems material and appropriate for enforcement and those that are not material and could be addressed outside of the FCA.  Establishing more transparent standards should be a HUD task which would provide information to DOJ on appropriate remedies and liabilities for lenders and servicers such as indemnification or premium adjustments.

Lenders that make immaterial errors should be granted safe harbor from a denial of claim and forfeiture of premiums as should lenders who cure material violations based on FHA remedies. Appropriate remedies should consider the systemic nature of the problem, the lender’s overall quality of originations, the extent to which the defect may have created or increased the severity of default, and the involvement of senior management in the incident. The two agencies should ensure they have a process to reach a mutual agreement on claim resolution.

The report notes the absence of any federal regulations regarding a national loss mitigation standard. There is a Consumer Financial Protection Bureau (CFPB) regulation that mandates a standard for evaluating delinquent borrowers for loss mitigation and recent efforts from the GSEs, the Mortgage Bankers Association, and FHA to use crisis-era programs as a foundation for standards.  But the industry is dealing with loss mitigation offerings that vary across guarantors and servicers of both government and private sector loans. The results in inefficiencies and uneven treatment of borrowers needing relief.

Federal mortgage programs should work toward standardizing the most effective loss mitigation features. They should align best practices to facilitate the most effective and efficient modifications; ones that are in the interest of borrower and investor, promote transparency, reduce costs, and mitigate the impact of defaults. There should be standard parameters including the application package, affordability standards, waterfall standards, and referrals to financial counseling, but no requirement for a specific modification product.

Recommendations specific to FHA include a review of its servicing requirements and changes to its multi-part foreclosure process that would allow servicers to miss some intermediate deadlines without penalty while sticking to the broader timeline.  FHA should also reevaluate its property conveyance framework and continue using while expanding programs to reduce the transfer of foreclosed properties to HUD.

State foreclosure processes received a lot of attention in the report. Treasury says the variations across states have been highly problematic for servicers.  The average timeline for completing a foreclosure was about six months in 2007 but reached 33 months ten years later, with the judicial states requiring even more time. While the volume of loans in the foreclosure inventory nationwide is back to pre-crisis levels, the foreclosure rate remains high in judicial states, exceeding three years on average in some.

Borrowers, according to the report, pay a portion of the costs of those delays due to the risk premium embedded in the interest rates for states with protracted foreclosure timelines. It also maintains that for federal housing programs, where there is some national pricing, the cost of long foreclosure times is born by borrowers in states with shorter ones.  The extended process also negatively affects property values and appreciation of nearby homes. Treasury says that housing prices in nonjudicial states have appreciated twice as much since their pre-crisis peak than have those in judicial states and maintains that judicial review leads to higher rates of persistent delinquency without appreciably improving borrower outcomes.

States should seek establishment of a model foreclosure law and amend their foreclosure statues accordingly.  Federally supported programs should consider a guarantee and insurance fee surcharge for those states with foreclosure timelines significantly exceeding the national average to cover the additional costs.

When investors fled the market after the housing crisis Ginnie Mae experienced a surge in volume and also a change in its issuer base as non-depository issuers rushed into the void left by depository institutions. Somewhat the same occurred in the GSEs seller-servicer counterparty population. This shift, with nondepositories’ less standardized approach to safety and soundness regulation, may create increased risk. While they are subject to federal financial oversight they are not subject to the uniform safety and soundness standards imposed on banks. They also do not have access to the liquidity sources of banks and this is of particular concern with nonbank servicers. Counterparty risk represents Ginnie Mae’s primary financial exposure.

While Ginnie Mae and the GSEs have various counterparty risk-management tools, the data quality and reporting fields may not be sufficient to assess counterparty financial health. Further, despite the dramatic increase in Ginnie Mae’s portfolio, it lacks the flexibility to adjust its MBS fees and hire additional staff for risk management.

Treasury recommends that Ginnie Mae, along with the Federal Housing Finance Agency (FHFA), the GSEs, and the Conference of State Bank Supervisors work to develop standardized, detailed reporting requirements on nonbank financial health including details around funding structures and that Ginnie Mae be encouraged to consider further counterparty risk mitigation including stress-testing requirements. The agency should also begiven the ability to charge risk-sufficient guaranty fees and should undergo an assessment of its staffing and contracting policies and enabled to pay salaries comparable to other financial agencies to attract personnel with the necessary expertise.

Nondepositories should be required to provide greater more information about their financial health. Greater standardization of requirements and reporting could benefit them as well by eliminating variations across the states of counterparty requirements.


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How Much House Can Your Afford?

What is a Conventional Mortgage Loan?

A conventional loan is any loan not insured or guaranteed by a government agency such as (FHA) Federal Housing Administration, (VA) Department of Veterans Affairs and (FmHA) Farmers Home Administration. Convention Loans are secured by Fannie Mae or Freddie Mac. Conventional Mortgage Loans a great alternative to FHA financing for borrowers looking to purchase with a low down payment or refinance with limited equity. Superior Mortgage Lending LLC is a leading provider of Conventional Mortgage Loans in Las Vegas, Henderson, North Las Vegas, Summerlin as well as the state of Nevada. For more information on Conventional Mortgage Loans contact us today at (702) 507-4170.

Image result for dream home las vegas

 How Much House Can Your Afford?

Before you start shopping for a new home, determine how much you can afford to spend. Your full mortgage payment cannot exceed a third of your gross monthly income. So if your monthly gross income is $3,000 than your mortgage payment should not exceed $1,000 including (PITI) Principal, Interest, Taxes and Insurance.

Here are few things to consider:

  • Your monthly income
  • Your available funds for down payment
  • Your monthly expenses
  • Your credit score

It’s very important to consider getting pre-approved from a licensed mortgage professional. An Independent Mortgage Professional such as a Mortgage Broker will be able to offer you several loan options and find you the best available loan programs for your needs. Call today to speak with a Mortgage Professional and get a Pre-Approval  (702) 507-4170

Lender Services and Products

Did you know? Maxwell and HousingWire recently teamed up to survey lenders across the country and found that 70% of lending institutions are either actively purchasing or already have a digital mortgage solution in place. Even in a challenging and constrained market, lenders understand the impact that a technology-fueled process can have on internal efficiencies, close times, borrower satisfaction, and referral volume. Don’t get left behind! Maxwell’s lightweight and easy-to-implement technology empowers your team to amplify productivity, delight borrowers, and close more loans — faster. Today, lending teams on Maxwell are closing loans 45% faster than the national average, helping them achieve the ROI they deserve from a technology partner. Request your custom demo today!

3W Partners is leading client efforts to market a national title agency that is a custom-built centralized transaction platform, including purchase money transactions, and is completely digital, end-to-end. The agency is in growth mode, and because of the digitization and variable cost infrastructure, margins increase exponentially as volume grows. Has capability to scale services on-demand without making significant staffing changes, and is SOC2 Type II certified, the ultimate in information security. This is a great opportunity for the right buyer that will be deemed as a “good shepherd” of the business and its people, especially for a lender looking to control costs and the borrower experience. Serious inquiries only, to be vetted before sharing any information. No fishing expeditions here. To learn more, contact Scott Roller.

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Subservicing, Non-QM Products; Agencies Active in Capital Markets

Aug 13 2018, 8:37AM

Don’t think that correct mortgage documentation is important? Think again, or ask Citigroup. The Federal Reserve said Friday it had fined Citigroup $8.6 million over poor quality mortgage documentation practices at its CitiFinancial subsidiary in 2015. The Fed Citi mishandled customer files as it was preparing to wind down its mortgage servicing business, doing so in 2017. But there is good news! The Fed said that the problem was corrected, and the Fed is terminating a separate 2011 enforcement action against Citigroup on a separate residential mortgage loan servicing matter, citing sustainable improvements by the bank. Dot those i’s and cross those t’s!


Capital Markets

The various high-ranking officials within the Federal Reserve know just as much about the direction of the economy, short-term rates, and financing than anyone else, right? Fed Governor Quarles said the Secured Overnight Financing Rate (SOFR) is more liquid than Libor and should be used by banks when lending to one another going forward. Fed Kansas City President George said she believes “gradual further increases in our policy rate will be necessary to return policy to a neutral stance.” Fed Chair Powell said in Congressional testimony that the global growth outlook “remains solid” and the US economy is in a “really good place” and the “best way forward is to keep gradually raising the federal funds rate.”

The markets continue to expect the Fed to increase rates twice more this year baring any surprises in economic data or world events. The expected timing for those rate increases remains at the September and December meetings. Any questions?

As mentioned in this commentary, Fannie Mae issued the market’s first-ever Secured Overnight Financing Rate (SOFR) securities, a three-tranche $6 billion SOFR debt transaction scheduled to settle on July 30, 2018. This transaction should accelerate the development of the SOFR market and encourage other issuers in the debt markets to follow suit. The floating rate notes, offered in three maturities, 6, 12, and 18 months, were met with strong investor demand.

What else have those crafty Agencies been up to? Here’s a primer on the single security efforts. Loan originators should care because anything that contributes toward an active and liquid market for mortgages helps rates for borrowers.

Lender Products and Services

“Interest only payment options for your Jumbo Borrowers? We can do that! Stearns Wholesale introduces our Non QM Jumbo Product. With no private mortgage insurance required and eligibility based on FICO scores from 720 and up, the Non QM Jumbo provides flexible guidelines to help your clients qualify for more financing options. Income flexibility that allows for asset depletion, DTI > 43% and projected income. First time homebuyers with FICO scores less than 720 may access loan amounts up to $1M; experienced homebuyers can access loan amounts up to $1.5M. Big Win? We’d call this a Jumbo Win. Contact us for more details on the Non QM Jumbo and all the ways Stearns Wholesale can help you qualify more borrowers!”

CMC Funding, part of the Computershare Group, is aggressively buying servicing through its co-issue platform. With the co-issue process, the asset is sold directly to Fannie or Freddie while CMC Funding is simultaneously designated as the servicer. Why should you consider adding this delivery to your arsenal? Historically, with co-issue delivery your back-office expenses are lower – by some estimates up to 12bps. Additionally, you get all the benefits of selling agency direct without retaining servicing, you have readily available cash flow plus there is no servicing asset to maintain or value monthly – worth exploring!

  • CONVENTIONAL LOANS – Giving you a low down payment, a great rate and a head start on your equity
  • FHA LOANS – Taking FHA borrowers to a new level with industry-leading government rates and pricing
  • VA LOANS – A hero for our veteran borrowers. Whether you are purchasing a new home or refinancing
  • REFINANCE LOANS – Multiple options allowing you to refinance with aggressive pricing that help you lower your payment or cash-out
  • JUMBO LOAN – Look no further. Superior gives you the pricing and turn times you deserve with competitive pricing 
  • FIRST TIME HOME BUYERS – We have great alternatives for borrowers looking to purchase with a low down payment
  • MORTGAGES FOR CANADIAN CITIZENS – Canadian citizens who are interested in purchasing a second home in the US. We can help!
  • COMMERCIAL LOANS – With over 30 years of business, commercial and multifamily purchase, refinance and construction financing experience
  • ELITE – The obvious choice for top-tier borrowers! Comprised of some of the best rates and pricing in the industry. You’ve build outstanding credit, you deserve an outstanding rate

CONTACT US TODAY 702-507-4170

One of the Best Mortgage Brokers in Las Vegas. Helping You Finance Your Dreams!

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Mortgage, Groupon and card debt: how the bottom half bolsters U.S. economy

PHILADELPHIA (Reuters) – By almost every measure, the U.S. economy is booming. But a look behind the headlines of roaring job growth and consumer spending reveals how the boom continues in large part by the poorer half of Americans fleecing their savings and piling up debt.

A Reuters analysis of U.S. household data shows that the bottom 60 percent of income-earners have accounted for most of the rise in spending over the past two years even as the their finances worsened – a break with a decades-old trend where the top 40 percent had primarily fueled consumption growth.

With borrowing costs on the rise, inflation picking up and the effects of President Donald Trump’s tax cuts set to wear off, a negative shock – a further rise in gasoline prices or a jump in the cost of goods due to tariffs – could push those most vulnerable over the edge, some economists warn.

That in turn could threaten the second-longest U.S. expansion given consumption makes up 70 percent of the U.S. economy’s output.

To be sure, the housing market is far from the dangerous leverage reached in 2007 before the crash. With unemployment near its lowest since 2000 and job openings at record highs, people may also choose to work even more hours or take extra jobs rather than cut back on spending if the money gets tight.

In fact, a growing majority of Americans says they are comfortable financially, according to the Federal Reserve’s report on the economic well-being of U.S. households published in May and based on a 2017 survey.


How can I get additional cash when refinancing?

When you secure a refinance loan against a house with sufficient equity, you may have the option to receive some of that equity by refinancing for a   larger amount. With this cash-out refinancing option, you refinance your original loan and receive additional funds that you can use to consolidate debt,   meet unexpected expenses, or pay for large purchases. You also may be able to qualify for a lower rate, or shorter loan term, depending on your  situation. Explore refinancing options today to find out if refinancing might be right for you.

 Call Today to Find Out if Refinancing is right for you (702) 507-4170


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Builder Confidence: Strong but Unchanged, Material Costs Rising

As analysts had expected, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) remained at 68 this month.  The reading still indicates a strong level of builder confidence in the new home market, but the HMI has been relatively static for months, moving within a two-point range, 68 to 70, since March.

NAHB surveys its new home building members monthly on their attitude toward the market.  They are asked to grade their perceptions of the current market and the market they expect over the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.  NAHB has been conducting the survey for more than 30 years.

In July the HMI component index measuring current sales conditions was also unchanged at 74 while the component gauging expectations over the next six months dropped from 75 to 73.  Builders boosted their perceptions about buyer traffic, raising that index by two points to 52.

NAHB Chairman Randy Noel said, “Consumer demand for single-family homes is holding strong this summer, buoyed by steady job growth, income gains and low unemployment in many parts of the country.” However, NAHB Chief Economist Robert Dietz pointed out that, while demand for new homes is growing, builders are burdened by rising material costs.  “Builders need to manage these cost increases as they strive to provide competitively priced homes, especially as more first-time home buyers enter the housing market,” he said.

Regional results are presented as three-month moving averages.  The index for the Northeast rose one point to 57 while the Midwest’s was unchanged at 65.  Both the West and South fell one point to 75 and 70, respectively.

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Financing a Condo? Recent Guideline Changes Could Make a Big Difference

Fannie Mae recently made some fairly big changes to the condo underwriting process.  While it may not affect everyone in the market for a condo, it will make all the difference for others.  MND community member Ted Rood provided this excellent overview:

If you’ve ever financed a condo, you’re likely familiar with the term “condo reviews”.  These reviews include analysis of condo complexes’ financials and insurance, breakdowns on units’ ownership and residency, the percentage of owners in arrears on Home Owners’ Association (HOA) dues, any pending legal actions, and more.  Lenders must obtain them on every condo loan, in one of two different variations: “limited” and “full” reviews. If complexes don’t meet the requirements, buyers in that HOA can’t get financing.  Far more complexes fail full reviews than limited, a distinction I always address with clients early in the loan process.

Image result for las vegas condo

Limited reviews are fairly routine, consisting of a short questionnaire and insurance documentation from condo management.  HOA management companies typically charge nominal costs to complete the questionnaires. Owner occupied condo loans with down payments of at least 10% (25% for second homes) are eligible for limited reviews.  It’s fairly unusual for a condo complex to fail a limited review. I’ve had numerous complexes fail a full review, yet meet limited review requirements.

Historically, however, all investment condo loans (regardless of down payment) required full reviews, which entail added cost/time to acquire more detailed info from HOA management BEFORE lenders even know if the complex meets full review requirements!  That’s a situation buyers, sellers, lenders, and agents all find stressful. No one likes uncertainty in the home buying process.

Fortunately for rental condo buyers, however, Fannie Mae recently announced that investment condo loans with 25% or more down were now eligible for limited reviews.  Why is this a big deal?  Rental condo buyers who put 25%+ down already get improved loan pricing from Fannie Mae, saving 2-2.75% of the loan balance (up to $5500 on a $200,000 loan!) compared with those putting 15-20% down.

In short, many investment condo buyers were putting 25% down, but still had to cope with the uncertainty and cost of full condo reviews.  They’ll be pleased to hear that Fannie Mae’s logical guideline reform just made rental condo loans far simpler.

Fannie Mae also expanded their Property Inspection Waiver (PIW) program to condos in June.  A PIW is often referred to as an “appraisal waiver”, and allows lenders to close certain loans without the expense/time of appraisals.  There’s nothing agents, buyers, and sellers love more than hearing their transaction doesn’t need an appraisal. PIWs are determined automatically by Fannie Mae’s automated underwriting engine Desktop Underwriter or “DU.”

Between these two guideline revisions, Fannie Mae has made condo financing faster, cheaper, and far more predictable.   More predictable loans mean more closings, higher condo values, happy buyers, sellers, agents, and lenders. It’s a big win for everyone.  Thanks, Fannie Mae!

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