Things have been pretty tame and quiet these last number of weeks. Everyone expected Greenspan to lift the Fed rates by a quarter point, which he did. If anything, the increase only helped the mortgage rates, because the market had already anticipated it and so had priced in the increase already. Right after the upward move, the mortgage rates started to stabilize and even move slightly lower.

It's summer and the speed of the market has slowed down some. People are taking vacations, have already moved into their new homes already, or are still shopping for the home they want with limited inventory out there. Of course, different areas around the country are experiencing varied situations, but at least here in the Bay Area in California we are seeing steady, continued increases in home prices and demand out numbering the supply. Even at that, loan applications have decreased and a loan officers day is tending to end earlier in the evening than last year at this time, just due to lower volume of business.

Rates have continued to be higher than they were last year up until Oct. 8th when they went up and have not come back down to that level since. Back then you could find a 30 year conforming (under $240,000) fixed, at 6.875% for no points. Now you are looking at somewhere around 7.5 to 7.625% at no points for the same loan. That's almost ¾ of a percent on the rate increase. Obviously that brought the refinance market to an almost dead stop. At this point, most clients have at least that rate or better already, so there's not point in pursuing something different. Now for purchases, they are still excellent rates! 30 year fixed rates in the 7's. Still wonderful, when you've seen rates in the double digits in past years, such as 13% even as high as 18% which I saw in 1983. Amazing huh? Let's get things into perspective here. These rates are still wonderful!

Our office went through training on the new automated underwriting program for Freddie Mac last week with one of our primary lenders. We already had been working on the Fannie Mae one. This is allowing many of our customers to receive an approval within minutes rather than weeks. Not everyone will fit the requirements or parameters to have these loans approved that fast, and all loan types are not available yet for that program, but for many people this is a real God sent as a time saver.

What takes place now, for those of you who aren't sure how it works, the loan officer inputs the typical information from the client that would go onto a standard loan application, into the computer into a special program. Then a three bureau credit report is merged into the package electronically and the entire thing goes on line to either Fannie or Freddie and is underwritten within minutes, either giving us an approval with conditions, or a "refer" which basically means that it has been denied under the automated system but then needs to go to a "live person" underwriter to review the file and make a decision based on the old standard guidelines. If your information on the application meets the acceptable guidelines then your approval is in hand in minutes and it will tell us what type of documentation we need to collect from you. Typically, when the approval comes back, there is far less needed, like one current pay stub instead of a months worth. Maybe one current bank statement rather than 3 months worth. It saves time and in most cases, money as well. 

We are all still learning how to do this procedure, and in some cases the lenders that we are using for this process are excellent lenders to work with but they might not always be the very lowest rates available in our shopping, and the very lowest lenders in rates for any given day, might not have this program available, SOO, for many of my clients, I'm going through the old way, if I know that I can improve their rate. It really depends on how fast the client needs the money and which lender has the better rate at the time we need to do something or lock it in.

Yes, we are in a new world of technology and our company for one, is making sure that we have it all available to us and at our fingertips, literally. Drop me a note! I appreciate the opportunity to work with you.