Federal Reserve Halts Purchase Of Bonds.

For the first time in 37 years, the Federal Reserve halted purchase of bonds on Wednesday, October 29. This came as no surprise to many, as the Fed has been steadily cutting purchase of mortgage-backed securities for the entirety of 2014, but it certainly is jarring to see the program finally come to a halt.

What does this mean for you the borrower and client? It means that there is potential for government debt prices to be pushed down in potential declining demand. This also means that this action could raise yields simultaneously.

The process that central banks began after the recession, called quantitative easing (QE), is a method used to stimulate monetary value when an economy suffers to do so itself. When the Fed began the program, the intention was never to last forever, but just long enough to see the market stabilize on its own, at which point the “easing” would begin. This works by the central banks buying financial assets from commercial banks, which lowers yields and increases monetary base at the same time.

Although tapering didn’t begin for the Fed until last December, the 10-year Treasury yield had already climbed to almost 3 percent. This is generally seen as a good sign by economists; while this is not a high number, it is higher than the previous percentage which was below 2 percent. The higher the treasury yield, the better the economic outlook. With the purchase of bonds being halted, experts believe that the economy and monetary value could continue to see a boost, bettering both the market and the economy.

Stay up-to-date on the bond market and treasury yields at Forbes.com or mortgagewatchdaily.com.


Lender Paid Mortgage Insurance (LPMI) is a type of insurance used for borrowers who cannot afford to make a down payment that is at least 20% of the total loan amount needed for the house you want to buy. Despite the catchy name, Lender Paid Mortgage Insurance is not exactly paid by the lender. It is essentially paid by you, the borrower, in the form of one large payment up front or in a series of smaller payments that will be built into your mortgage rate. This of course means that you’ll have a slightly higher mortgage rate than if you had have put 20% of your total loan amount down (but that’s small potatoes compared to paying a lump sum large enough to cover whatever the lender determines will insure your home).

Estimated Example

With 20% Down

  • Loan Amount $220,000
  • 15 Year Mortgage
  • 4.75% Mortgage Rate
  • $1,711.23 Monthly Payments
Without 20% Down

  • Loan Amount $220,000
  • 15 Year Mortgage
  • 5.75% Mortgage Rate (1 point added to cover LPMI payment)
  • $1,826.90 Monthly Payments

For a mortgage lender, the idea of investing in a borrower who cannot make a down payment of at least 20% on his or her home is somewhat risky. The insurance protects your lender from losing money, in case you default on your loan. If you were to default, the lender would be repaid a portion or in some cases, the total amount of the loan through the insurance that was purchased. The percentage of what will be returned to the lender is dependent upon the type of insurance that they choose to get. Also, since mortgages with less than a 20% down payment require insurance, LPMI saves you money, versus using Private Mortgage Insurance, or PMI.

LPMI is through your lender, therefore your lender would include your payment for the LPMI in your monthly mortgage payment. PMI on the other hand is not offered through your lender, you have to go out and get it yourself. So you’ll be paying for your insurance premium on top of your monthly mortgage rate as two separate charges rather than just one. It’s like (and my ladies will understand this) going into Payless and getting two pairs of shoes. When they have a buy one get one (BOGO) going on, you buy one pair and get another pair at a discounted price just for buying the first pair. Whereas if you bought one pair of shoes at Payless, and then another pair at JC Penny, you’d be paying full retail price for both shoes. It’s like you’re paying less for Mortgage Insurance because you are purchasing it through your lender rather than purchasing it out right from an outside insurance company. You’re basically getting the insurance cheaper because you’re already doing business with the lender rather than doing business with the lender and with a separate insurance company. Use two companies, pay two fees. Use one company, pay one fee.

Using your payment(s), the lender then purchases mortgage insurance on your home. And just so we’re on the same page, allow me to clarify something that is very important. By mortgage insurance, I don’t mean the kind of insurance that protects your home in the unfortunate event that your house were to be damaged by a flood or be conquered by savage barbarians, a fire, hurricane, or any other unforeseen disaster, natural or otherwise. That type of insurance is called Hazard Insurance and it must be purchased by you the borrower.

Before asking about receiving LPMI, think on these few things:

As is the case with most potentially credit changing transactions, like buying a car, or applying for a credit card, your FICO credit score will be a determining factor in whether or not you qualify for LPMI (check back for my article about FICO). What score is considered a good credit score will be up to the lender, as the lender is the one that is taking the risk. So be sure to keep your credit in good standing.

Also, think about the life of your loan. A fixed mortgage rate does not change throughout the life of the loan. So if you have your LPMI included in your rate, you will be paying that (somewhat higher than average) rate for the entire life of your loan. In other word, if you’re applying for a 30 year fixed mortgage, LPMI may not be the best option. However, if the life of your loan is relatively short, say ten or fifteen years, LPMI may be a good way to go.

Also remember that you can get tax relief for paying LPMI. So the cost of your LPMI can be deducted when you are doing your taxes. (Please remember that I am not a tax professional and this is something that would be wise to discuss with your tax preparer before making a final decision.)

If you are considering buying a home or you are pondering over a possible refinance, keep Lender Paid Mortgage Insurance in your think tank. Ask your lender about it, and know your options. Just remember that LPMI can be a great financial possibility for you by helping you to save money throughout the life of your loan.

Federal Reserve Press Release

For immediate release

Information received since the Federal Open Market Committee met in September suggests that economic activity is expanding at a moderate pace. Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources is gradually diminishing. Household spending is rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has continued to run below the Committee's longer-run objective. Market-based measures of inflation compensation have declined somewhat; survey-based measures of longer-term inflation expectations have remained stable.

The Fed is getting more and more frisky as time passes. They still give us a little “yeah, but,” (where they say things are good but then point out stuff that makes them nervy), but they are getting a little more definitive in their optimism about the economy. They point out that things keep getting better for people looking for jobs and that people and companies are spending more dough. They do still worry a bit about the housing market. All-in-all, this is like getting out of the dentist chair with no cavities and only a mild warning to do a better job flossing… Nice work US economy!

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators and inflation moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced. Although inflation in the near term will likely be held down by lower energy prices and other factors, the Committee judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year.

Paragraph 2 is the, “This is our job,” paragraph. They remind us that their job is to balance people getting jobs with the prices people pay. The Fed tells us that, in their opinion, they think they are doing a pretty sweet job balancing the two “mandates.” Seems the Fed is feeling pretty darn good about themselves these days…

The Committee judges that there has been a substantial improvement in the outlook for the labor market since the inception of its current asset purchase program. Moreover, the Committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability. Accordingly, the Committee decided to conclude its asset purchase program this month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

This is a very exciting and momentous paragraph (at least if you’re an econo-nerd and dig this kind of stuff). The Fed, way back in October of 2008, announced they would do something they had never done before. They announced that they would go into the market and buy giant amounts of mortgage and Treasury bonds. They did that to drive the rates on those bonds down which would cause people to refinance and generally reduce their monthly payments (hoping people would take the savings and spend it on stuff which would cause businesses to make more of that stuff and hire more people to make the stuff). This paragraph announces that, after 5+ long years, that program of buying those bonds has come to an end. This wasn’t a surprise – but it ends a very interesting chapter in US economic history and Federal Reserve history.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee anticipates, based on its current assessment, that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program this month, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored. However, if incoming information indicates faster progress toward the Committee's employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.

This was the paragraph all the economists and bond traders around the world jumped to the instant this report came out at 2p. They were looking for the four magic words that I highlighted above. Those words tell the world that the Fed intends on keeping short term rates at near 0% for a while. That makes bond traders happy. However, because the Fed was so downright giddy with the rest of their announcement and so happy about the way they see the economy shaping up – both the bond and stock markets have reacted somewhat negatively. Why would those markets not like a happy Fed? Because a happy Fed is a Fed that isn’t pumping money into the economy as much and less money in the economy means that it won’t be as easy for lenders and companies as it may have been in the past. But don’t be alarmed – the market changes weren’t that big. For the most part – this wasn’t an earth shattering announcement.

When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.

More chitty chat about keeping rates low. Okay Fed – we get it.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Stanley Fischer; Richard W. Fisher; Loretta J. Mester; Charles I. Plosser; Jerome H. Powell; and Daniel K. Tarullo. Voting against the action was Narayana Kocherlakota, who believed that, in light of continued sluggishness in the inflation outlook and the recent slide in market-based measures of longer-term inflation expectations, the Committee should commit to keeping the current target range for the federal funds rate at least until the one-to-two-year ahead inflation outlook has returned to 2 percent and should continue the asset purchase program at its current level.

All the nerds did NOT agree! Narayana Kocherlakota isn’t as happy with the economy as the rest of the nerds. He’d rather the Fed commit to keeping rates low until inflation goes up to at least 2%. Word on the street is that he challenged Chairwoman Yellen to an arm wrestling match to decide things and that Ms. Yellen accepted and that, let’s just say, Mr. Kocherlakota is a little embarrassed right now…

When is the right time to finance a home?

The time to finance a home for the best rate could be now, as mortgage rates across the country have reached a low over the last 16 months at 4.12 percent, according to Freddie Mac.

This number is quoted for a 30-year fixed rate conventional mortgage, and since Jan. 1, people have been finding themselves able to afford about 8 percent more of a home in terms of quality. Las Vegas, in particular, may be experiencing their home rates flattening out as the median home price reached $200,000 in August, which is an almost 10 percent increase from the same time last year, according to a recent report from the Greater Las Vegas Association of Realtors (GLVAR). This is good news for home owners and buyers as the economy continues to recover from the recession that severely impacted the value of property nationwide.

Although property values increase as pricing begins to level, low mortgage rates are not necessarily available to everyone. Those who will see the lowest rates would be considered prime lenders, defined by Freddie Mac as a lender with a credit score over 740 and who can offer a 20 percent down payment. This, however, should not discourage those from financing a home.

If you’re interested in mortgage rates in the greater Las Vegas area, please contact Valley West Mortgage at 702-696-9900 or info@valleywestmortgage.com

Two month lows force mortgage rates to fall even lower.

Mortgage rates were lower yet again, for the 10th consecutive day without rates moving higher. Since the September 6th jobs report, rates have only risen once. Conforming, 30yr Fixed rates are now down to 4.375% (4.375%) or amazingly efficient combinations of closing costs and rates though several lenders. Everyday we receive more proof that the FOMC announcement and recent Employment Situation Report marked and confirmed at least a short term turning point for interest rates. This is the correction that we'd been hoping for, and we're now a day or two into it with high hopes.

Matthew Graham - Chief Operating Officer, Mortgage News Daily / MBS Live wrote in an article today: "Markets are comfortable treating early September rates as near term highs as long as the economic data doesn't surprise to the upside. That means that the fate of rates is tied to the economic reports that come out most mornings. Stronger data will gradually persuade investors that the Fed will reduce the pace of bond buying sooner than later. On some small scale, that was a risk this morning, but Consumer Confidence came in slightly weaker than forecast, and rates continued to improve. We'll face similar risks with tomorrow's data, but it will either take a concerted effort from several reports or a strong Employment Situation report on Oct 4 to completely dash the dreams of this low-rate rebellion. Between now and then we'll likely see some ups and downs, as opposed to the exclusively flat-to-sideways bias we've had since Sep 6th."

Citicorp to layoff 700+ mortgage professionals a week before christmas.

According to Las Vegas news stations Citicorp, also known as Citibank, will be closing its mortgage lending division by the end of the 2013 year. That leaves 700+ (760 as first estimate) out of a job one week before Christmas. Citicorp is based out of New York, NY. The company made an announcement that stated the closure is part of a nationwide reduction effort that will results in 1,000+ layoffs. The company is doing the same thing in Irving, Texas although many of the employees will be reassigned to a different position. The company said the layoff is just a response to the low demand for new mortgages and the refinancing of current loans. The Citibank Call center will not be affected, nor will any of its 300+ employees.

“In response to decreased demand for mortgage originations and refinancing, CitiMortgage is eliminating some positions in sales, fulfillment, underwriting and mortgage default functions predominantly at Citi sites in Las Vegas and Irving, Texas,” Mark Rodgers, director of Citi public affairs, said in a statement issued today.

Severance packages will be based on time of service to the company plus an additional two months of paid benefits. Home mortgage interest rates continue to be at or near record lows, but Rodgers said the refinancing market has slowed because most people seeking to refinance have already done so.

WHat this means for anyone looking for a mortgage

If you or someone you know is interested in finding out more information about obtaining a new mortgage or a mortgage refinance, you can always call Valley West Mortgage and out team of mortgage professionals.

Round 4: Knockout Cancer for Candlelighters Kids

Round 4: Knockout Cancer for Candlelighters Kids Thursday, October 03, 2013

If you have ever wanted to see what the hype is all about when it comes to the UFC, Mixed Martial Arts and Boxing all mixed into one. Then you are definitely in luck. The fourth annual Round 4: Knockout Cancer for Candlelighters Kids will be filled with jam pack action, great fun for all ages, and promises to deliver the most hard hitting, bone breaking entertainment Las Vegas has to offer.

Valley West Mortgage has been one of the leading sponsors since this events inception. We are very proud to be apart of this amazing opportunity alongside partners like All Nevada Insurance. If you haven't met Vinnie Mannino of All Nevada Insurance, then you are missing one of the coolest men in Las Vegas. Vinnie is the person behind the scenes. He is responsible for putting on this amazing event. He even participated in the very first Knockout for Cancer. When he is not helping you lower your insurance rates, he is helping raise money to help kids knock out cancer.

The Event

If you have never been to any of the Knockout for Cancer events, we want to explain some details and then show you a few photo's. The Knockout Cancer for Candlelighter Kids events take place at an amazing venue. The first venue was at Xtreme Couture. what an amazing place to watch a mixed martial arts bout at. There was not a bad seat in the house. Anywhere you sat, you could see the women holding the round signs, the fighters as they entered the cage and every blow that was landed. Last year, Round Three was held inside The Pearl Theater inside of them Palms Hotel. I thought that Xtreme had some awesome seats. The Pearl did not let us down. It's like being inside of the most amazing mansion you have ever seen, and there is something more than a fish tank to stare at. What hospitality we had from the Palms that night. That's why The Palms Hotel and Casino is one of our favorites on the strip.

This year Round 4 is being held inside of the Palms Arena. Located at 4500 W Tropicana Ave Las Vegas, NV 89103. This venue promises to offer one of the best views in all of Las Vegas, to see some of the toughest fighters in the world square off round after round to knockout cancer for Candlelighter kids. The Orleans Arena is home to the Las Vegas Wranglers, multiple basketball tournaments and even motorcross racing. If you have not been inside of the Orleans Arena, Round Four: Knockout Cancer for Candlelighter Kids is the perfect event to see inside of the Orleans.

Need More Information

All though we have spent the last few minutes with you, describing on why you should come out to this event. We'll let the links below to buy tickets, view more details and become a sponsor speak for themselves. If that doesn't help, enjoy the picture gallery below.


Buy Tickets Become a Sponsor More Information

The Gallery


Mortgage rates are on the rise. Here is why:

Mortgage rates have seen historic lows due to a long running bull-market in bonds. Specifically mortgage backed securities. The demand has surpassed the supply and has caused interest rates to drop to the lowest rates in the last 10 years. As the demands start to be fulfilled, mortgage rates will start to go up. The market is at it's turning point according to portfolio managers-some of whom are running the nation's largest bond funds. This means it is time to say goodbye to the longest bull market for bonds in history. The reason: growing worries about inflation. While it is not a problem right now, there are several strong economic factors that typically lead to higher prices down the road.

Rates are already starting to rise, even without the Fed. This week, Treasuries and Mortgage Backed Securities saw a sharp sell-off, bringing yields-which move opposite to prices-to their highest level since October. Rising yields, when coupled with inflation, are a double-whammy to the value of bonds. With job growth comes purchasing power and pricing pressure on businesses and consumers. Yigal Jhirad, portfolio manager for Cohen & Steers, thinks this pressure is already underway. While significant inflation and higher mortgage rates are still far down the road, it is clear that they are on the horizon. This is actually a good thing for housing. The housing market has always performed better in the "sweet spot" of mortgage rates which is in that 5.50% to 7.00% range.

What happened to rates last week?

Mortgage backed securities (MBS) lost -93 basis points from last Friday to the prior Friday which pushed mortgage rates significantly higher from the prior week and marks the second straight week of higher mortgage rates. We have received month after month of positive economic news which would normally pressure mortgage rates upward but due to global instability, mortgage rates have benefitted from strong demand in MBS which have offset the positive economic news. But bonds started to sell off in a big way last week which pushed mortgage rates higher.
Why? Because banks started to dump their vast holdings of Treasuries and MBS. Banks had to hold on to capital while they were undergoing the Fed's "stress test". The "stress test" results were released last week and as a result, each bank definitively knew how much excess capital they had.This meant that they could finally liquidate their holdings of their very low yielding mortgage backed securities....this caused demand for MBS to fall off which pushed mortgage rates upward.

President Obama Reducing FHA Fees for Borrowers Seeking To Refinance

Las Vegas, Nv -

In his State of the Union address, President Obama laid out a Blueprint for an America Built to Last, calling for action to help responsible borrowers and support a housing market recovery. While the government cannot fix the housing market on its own, the President believes that responsible homeowners should not have to sit and wait for
the market to hit bottom to get relief when there are measures at hand that can make a meaningful difference.

Today, the President is announcing two steps the Administration is taking to support homeowners and their families – providing relief for service members and veterans, including those wrongfully foreclosed upon or denied a lower interest rate on their mortgages, and reducing fees for FHA borrowers looking to refinance. Along with the President’s broader plan to help millions of Americans refinance and save thousands of dollars a year, support the communities hardest-hit by the housing crisis, and help families avoid foreclosure and stay in their homes, this is part of the President’s overall strategy to support responsible homeowners and the housing recovery.

Providing Relief for Servicemembers and Veterans: On top of the historic settlement completed by the Federal government and 49 state Attorneys General last month, major servicers will be providing significant relief to thousands of servicemembers and veterans. Under the agreement, they will:

refund to servicemembers money lost because they were wrongfully denied the opportunity to reduce their mortgage payments through lower interest rates;

provide relief for servicemembers who are forced to sell their homes for less than the amount they owe on their mortgage due to a Permanent Change in Station;

pay $10 million dollars into the Veterans Affairs fund that guarantees loans on favorable terms for veterans; and

extend certain foreclosure protections afforded under the Servicemember Civil Relief Act to service members serving in harm’s way.

Reducing Fees for FHA Borrowers Seeking to Refinance: As part of the President’s aggressive effort to reduce barriers and costs for refinancing, the Administration is also announcing that the FHA will cut its fees for refinancing loans already insured by the FHA. An estimated 2-3 million borrowers could be eligible for this savings, providing the typical FHA borrower with the opportunity to save about a thousand dollars a year through refinancing than they could have under today’s fee structure.

Providing Relief to Service members and Vets Hurt by Mortgage Abuses

Today, the President is announcing relief that will be provided to thousands of service members and veterans by
servicers on top of the historic settlement completed by the Federal government and 49 state Attorneys General last month. This relief – which is in addition to the over $25 billion committed through the overall settlement – includes:

Compensating Servicemembers Wrongfully Foreclosed Upon: Servicers will conduct a review – overseen by the Department of Justice’s Civil Rights Division – of the files of every servicemember foreclosed upon since 2006 to determine whether any were foreclosed on in violation of the Servicemembers Civil Relief Act (SCRA). Servicers will compensate those who were with a payment equal to whichever of the following sums is higher:

o the servicemember’s lost equity, plus interest, and an additional $116,785; or

o an amount provided for the same violation as a result of a review conducted by the banking regulators.

Compensating Service members Wrongfully Charged Higher Interest Rates: Servicers will conduct a review – also overseen by DOJ’s Civil Rights Division – of the files of their servicemember clients dating back to 2008 to determine whether they charged any an interest rate in excess of 6% on their mortgage after a valid request to lower the rate, in violation of the SCRA. Servicers will be required to provide any servicemember who was wrongfully charged interest in excess of 6% with a payment equal to at least four times the amount wrongfully charged.

o For example, if a servicemember who took out a $200,000 mortgage with a 7% interest rate was wrongfully denied a request to lower their interest rate to 6% over a course of 18 months, they would receive a payment of over $9,000, plus interest.

Providing Relief for Servicemembers Forced to Sell Their Home at a Loss Due to a Permanent Change in Station: Under the Department of Defense’s Homeowners’ Assistance Program (HAP), some servicemembers who are forced to sell their home at a loss due to a Permanent Change in Station (PCS) may be compensated for the loss in their home’s value. Under this settlement, servicers will provide short sale agreements and deficiency waivers to those servicemembers who were forced to sell their home for less than they owe on their mortgage due to a PCS, but who are not eligible for HAP. This means that the benefits of that program will finally be extended to servicemembers who bought their homes between July 1, 2006 and December 31, 2008, or who received a PCS after October 1, 2010.

• $10 Million for the Veterans Housing Benefit Program. Under the settlement, servicers will pay $10 million into the Veterans Housing Benefit Program Fund, through which the Department of Veterans Affairs guarantees loans provided on favorable terms to eligible veterans.

• Foreclosure Protections for Servicemembers Receiving Hostile Fire/Imminent Danger Pay. The SCRA prohibits servicers from foreclosing on active duty servicemembers without first securing a court order, but only if their loan was secured when they were not on active duty. The settlement extends this protection to all servicemembers, regardless of when their mortgage was secured, who within nine months of the foreclosure received Hostile Fire/Imminent Danger Pay and were stationed away from their home.

Reducing Fees for FHA Borrowers Seeking to Refinance – Saving Homeowners Hundreds of Dollars A Year

The FHA offers a streamlined refinancing program to allow borrowers with FHA-backed mortgages to refinance their loans at lower cost and with fewer burdens. This program has helped hundreds of thousands of families refinance, but lender reticence and fees have kept many families from participating. Today, the President is announcing new steps to increase the reach and effectiveness of the program, reducing the fees that participants will pay on these loans.

Cutting its Fees Substantially: The FHA currently charges an up-front mortgage insurance premium of 1% of the borrower’s loan balance and an additional 1.15% of the balance per year. FHA is reducing the up-front premium to .01% for streamlined refinancings of loans originated prior to June 1, 2009 and cutting the annual fee for these refinancings in half, to .55%. Together these reductions could save the typical FHA borrower about a thousand dollars a year.

An Estimated 2-3 Million FHA Borrowers Will Be Eligible to Benefit: We estimate that approximately 2-3 million FHA borrowers are eligible to benefit from the program with these changes. While it is always difficult to estimate participation in these programs, this will result in significant monthly savings for hundreds of thousands of families.

Reduction in Fees Could Save the Typical Borrower About a Thousand Dollars a Year – On Top of Savings from Refinancing

• Consider a typical FHA borrower with $175,000 outstanding on their mortgage. Currently, if this borrower refinanced into a 4% loan, they could reduce their monthly payments to nearly $1,010 a month, including both the upfront and monthly mortgage insurance premiums.

• With lower mortgage insurance premiums, this borrower could reduce their total monthly payments to about $915 per month. That means nearly $100 in additional savings per month for an FHA borrower – on top of the savings they would receive from refinancing to a lower interest rate.

Fee Reduction Builds on Earlier Efforts to Expand Access to FHA Refinancing by Removing Refinancing Program from Lender Report Card: Earlier this year, the Administration announced changes that will finally remove the reticence that many lenders have had to provide refinancing to additional families. The FHA uses a calculation called the “Compare Ratio” to assess lender performance and help determine whether they can continue to do business with the FHA going forward. To date streamlined refinances have been included in this calculation, and because many of the loans refinanced through the program come from higher risk years, lenders have been reluctant to offer the program to customers for fear that it would impact their score and thus their relationship with FHA. The FHA has now removed these loans from that analysis, thus removing this cause for concern for lenders and opening this program up to many more families.

Part of the President’s Broader Strategy to Help Families Refinance and Save: These steps are part of the Administration’s broader plan to provide access to responsible borrowers to refinancing – allowing the typical homeowner to save thousands of dollars a year. That includes:

o Providing Access to Refinancing for Borrowers With Loans Guaranteed by Fannie Mae or Freddie Mac: Many GSE borrowers who are current on their payments have nonetheless been unable to access refinancing, keeping them locked in high interest rate mortgages in a market offering historically low rates. To address one of the primary barriers to refinancing, a lack of adequate home equity, the Administration created the Home Affordable Refinance Program (HARP). This program has helped around a million GSE borrowers finally get access to the refinancing market, lowering their payments by hundreds of dollars a month.

o Putting Forward a Plan to Further Expand Access to Refinancing: On Feb. 1, the President announced a legislative plan to build on these changes to expand access to refinancing for responsible borrowers. The plan would remove the remaining barriers in the HARP program mentioned above, so that all those with loans insured by Fannie or Freddie who have been paying their mortgage on time will have access to simple, low-cost refinancing. It would also create a similar program for those families whose loans do not happen to be guaranteed by Fannie or Freddie. Together these steps would mean that no responsible borrower is locked out of today’s low interest rates just because home prices in their neighborhood have fallen. This would provide approximately 11 million families
with loans insured by Fannie and Freddie and 3.5 million families with non-GSE loans with the opportunity to save thousands of dollars a year.

Watch Las Vegas grow in 30 seconds

Las Vegas, Nv -

In the last 40 years, Las Vegas has made a lot of changes. Here is a short clip provided by the Goddard Space Flight Center of our city moving city limits.