Sam Thompson: Opteum Mortgage

I was hoping this might happen.  FHA may be coming to the rescue.  There is a big void out there now for customers with sub-standard credit scores that cannot qualify for conventional loans.  There are others that already own a home and  have a loan but need help with the type of mortgage they used to purchase their current home.  They may have one of those infamous conventional 2/28 loan programs where the rate can jump up to 12% after the first two years of the loan.  The “2” represented the time bomb period and the “28” is the number of days they have until they lose their home.

Seriously, I would like to meet the person that invented the 2/28.  I’m sure it was a Wall Street type, probably someone in their late 20s or early 30s that may have even originated loans for a few months before moving over to the investment world.  Can you imagine maxing out your mortgage payment on an adjustable rate mortgage for $200,000 at 7.5% only to see your rate increase to 12.25% after two years.   “But you can refinance the house after a year or so.”  You have to wonder how many times some loan officer or real estate agent said that to the homebuyer.

But let’s move forward.  The Senate passed an FHA modernization bill by a 93-1 vote today that will raise the FHA loan limit to $417,000 in high-cost areas and lowers the minimum down payment requirement to 1.5% from 3.0%.   The House passed its version of the bill in September.  So it could be law in early 2008.  So help is on the way, along with Santa…. 

 Best regards,
Sam Thompson
Loan Officer

Opteum Mortgage

678-742-6631
(office)
1-866-226-2066
(toll free)
770-301-0527
(cell)
678-585-8345
(e-fax)

222 Chastain Meadows Court, Suite 300
Kennesaw, GA 30144

email: Sthompson@opteum.com

web: http://www.opteum.com/sthompson

Email/call Sam to find our more about his competitive mortgages and weekly rates.

Opteum Mortgage: Mortgage News

Ringing in the new year will be a present from Fannie Mae and Freddie Mac to borrowers with credit scores under 680. Here is what these borrowers on conventional loans with Loan-to-values over 70% will receive on either purchases or refinances:

Credit score less than 620: Either a 2 discount point sur-charge or a higher rate of approximately ¾%

620-639: 1.75 discount point charge or higher rate of approximately 5/8%

640-659: 1.25 discount point charge or higher rate of approx. ½%

660-679: .75 discount point charge or higher rate of approx. ¼%

These changes will typically become effective in January. What it means to you is that lenders will not be able to determine the interest rate until they receive the borrower’s credit report if they are anywhere close to 680. If there are joint applicants, the lower of the two applicant’s middle scores will be the one that determines the interest rate….. So, theoretically, a borrower could be quoted a rate of 6.0% prior to loan app and end up with a 6.75% rate because their middle credit score was 619.

Rate swings: This week has been a pendulum for mortgage rates. Monday rates were virtually touching 5.5% on the 30 year fixed, the lowest we have seen in a few years. Things started reversing on Wednesday, turning back up about an 1/8%. We had further movement up today as they are back up to the 5.875-6.0% level. So the window of opportunity has closed for now, but perhaps the market overreacted again and will settle back down. Congratulations to those of you who made the decision to lock your rate in on Monday!

A Minus Loans: These loans are available at Opteum to borrowers with scores as low as 575 on purchases up to 95-100% LTV. Cash assets are needed to offset the low credit scores and can help someone with low scores, few trade lines and without even a rent history purchase a new home. I like to call this type of program “the New Sub-Prime”.

I will be working this weekend if you need me.

Best regards,

Sam Thompson

Loan Officer

Opteum Mortgage

678-742-6631 (office)

1-866-226-2066 (toll free)

770-301-0527 (cell)

678-585-8345 (e-fax)

222 Chastain Meadows Court, Suite 300

Kennesaw, GA 30144

email: Sthompson@opteum.com

web: http://www.opteum.com/sthompson